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Journal of Consumer Psychology 18 (2008) 175–178

Research Dialogue

Beyond rationality: The content of preferences

Ravi Dhar ⁎, Nathan Novemsky

Yale University, USA

Available online 9 June 2008

Abstract

The BDT literature has largely focused on demonstrations of violations of rationality (i.e. consistency) in individual decision making and hashad little to say about the content of preferences. While researchers concluded that inconsistency implied preferences were constructed, some wentso far as to presume that since preferences are constructed, substantive preferences do not exist prior to their revelation. In other words, theyextended the findings that individuals do not always know exactly what they want to imply that consumer's do not have any substantivepreferences. This clearly overstepped the bounds of the evidence, which was agnostic toward the existence of reasonably stable substantivepreferences. We applaud Simonson for calling attention to this point. While we do not believe that Simonson's “inherent preferences” lead topreference orders that behave any more rationally or consistently than those studied in the BDT literature, we nevertheless join him in his call forfurther research into the content of preferences and make a variety of suggestions about where that research will bear most fruit.© 2008 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved.

The principle of bounded rationality was the driving forcebehind the emergence of Behavioral Decision Theory (BDT). Thefield of individual decisionmakingwas consumed by the study ofhow choices or more precisely, preferences as revealed throughchoices, varied systematically from a normative benchmarkprovided by economic theories of consumer behavior. As wediscuss next, BDT researchers in using the standard of rationalpreferences have focused on the origination of rationalmore thanthe origin of preferences. This is in line with an economicviewpoint that was indifferent to how preferences came about.The standard criterion used in the literature to define rationality ofpreferences is the principle of consistency (Rieskamp, Buse-meyer, & Mellers, 2006) and over time, the focus shifted from aricher discussion of the rationality assumption and the implicationof its violation in consumer choice to a nearly singular focus ondemonstrations of inconsistency in decisions across differentelicitation methods, choice contexts, situations, etc. This is thebackdrop to Simonson's (2008) call for a shift in focus to what hecalls inherent preferences. We agree with his call for a shift awayfrom demonstrations of inconsistencies and toward an under-standing of how preferences are formed, how they change, andhow they express themselves across choice situations, but we see

⁎ Corresponding author.E-mail addresses: ravi.dhar@yale.edu (R. Dhar),

nathan.novemsky@yale.edu (N. Novemsky).

1057-7408/$ - see front matter © 2008 Society for Consumer Psychology. Publishdoi:10.1016/j.jcps.2008.04.004

several challenges in incorporating Simonson's notion of inherentpreferences in this endeavor. We begin by examining where BDTcame from and conclude by suggesting where we think it mighthead.

There are at least two very different assumptions that aremade in standard economics that are psychologically implau-sible and often lead to demonstrations of inconsistency. Oneassumption pertains to human ability to perfectly process allinformation when making choices. Clearly, not even econo-mists (any longer) believe this assumption. The psychologicalreality of finite processing capacity and selective processing ofinformation suggests that the use of consistency as a sufficientbenchmark to label preferences as irrational is not quite correct.Thus, inconsistency in choices due to processing constraintssuch as time pressure, resource depletion, or cognitive load(cf. Dhar, Nowlis, & Sherman, 2000; Percheptsova, in press;Wang, Novemsky, Dhar, & Baumeister, 2008) in our view isnot clear evidence of any irrationality in underlying prefe-rences. These inconsistencies are interesting and important asthey play out in the real world but they are not evidence ofthe presence or absence of inherent preferences and are notdiscussed further.

A second assumption in standard economics whose violationleads to inconsistent choices is the idea that people havecomprehensive or complete preferences (i.e., the assumption ofcompleteness or coherence requires people to have a stable

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ordering over all possible alternatives1). Many tests of constructedpreferences in the BDT literature are based on an empiricaldemonstration of inconsistent ordering in relatively simple choicessuch that information processing constraints discussed earlier arenot the source of inconsistency. We expect that violations ofcompleteness are likely to hold even for objects or aspects forwhich consumers have stable inherent preferences. Hencecompleteness violations do not speak to the issue of inherentversus constructed preferences. For example, assuming for themoment that Simonson's preferences for a pillow or its ingredientsare indeed inherent, we still expect that the exact quantity, quality,dimensions, or price paid is likely to be influenced by the context asit is extremely unlikely that Simonson's inherent preference for apillowwill also satisfy the assumption of completeness (i.e., peoplecannot be expected to have a comprehensive preference order forthe infinite number of possible variations in pillows). In otherwords, even people who inherently like pillows are extremelyunlikely to have complete stability in the attribute levelsrepresenting their most desired pillow and creative researcherswould be able to show inconsistent choices for these people. This isnot meant as a refutation of the usefulness of inherent preferences.In fact, it would appear from his paper that Simonson would agreewith this characterization.

It is important to stress that evidence of construction as basedon the principle of consistency says very little about whether ornot people have substantive preferences. The fact that immediatecontext (e.g. options presented, frame, task, etc) can influencewhether a consumer chooses a 1300 W Microwave for $99 or a1500 W microwave for $129, does not imply that this sameconsumer does not have a very stable substantive preference fora microwave over a toaster oven.2 In other words, one can have asubstantive preference for a microwave over a toaster ovenwithout having a complete or consistent ordering over allpossible microwave ovens. Unfortunately, the term preferenceshas referred to both the general content of preferences and thespecific ordering that is revealed in particular choices. It is quiteclear that the field has little to say about the content ofpreferences and that research has mainly shown how specificorderings of choice options are constructed.

In summary, Simonson argues that the BDT agenda hasfocused on construction and de-emphasized the role andexistence of inherent preferences. As pointed out above, theagenda has mainly focused on the rationality of preferences andis agnostic about the substantive content and origin of thesepreferences. Thus, the research program has had little to sayabout how these preferences come about, inherent or not, justthat they are shown to manifest inconsistent ordering. Sincepreferences in almost every domain, regardless of their origin,are likely to violate the principle of consistency, these violationsspeak to the rationality assumption about preferences but have

1 While completeness is often discussed in the context of incomparability ofoptions, we use it here more generally to refer to the inability to choose amongalternatives that require attribute tradeoffs.2 We recognize that it is difficult to define substantive preferences. While

there is ambiguity in a preference that has no reliance on attribute values, it stillseems to be meaningful in many circumstances.

little to say about the substantive content of the preferencesthemselves. Thus, it is fair to say that the field has emphasizedthe “rational” in the term “rational preferences.”We agree that aleap was made in the literature when scholars inferred from thedemonstration of preference inconsistency that somehow it isthe same as demonstrating people do not have substantivepreferences. What is demonstrated by these experiments is thatpeople do not have complete or transitive preferences. This is animportant point that may have been lost with the researchers(present company included) getting caught up in their cleverdemonstrations of various non-normative effects. We agree withthe call to put greater emphasis on understanding the substanceof preferences going forward.

Deconstructing construction

Simonson's paper makes two important observations aboutthe limitations of the empirical support for preference incon-sistency. The first observation refers to the experimental teststhat seemingly exaggerate the degree to which the ordering ofpreferences is constructed by examining unusual choices ortasks (perhaps in part because BDT researchers have littleinterest in the content of preferences). However, this is of lesscritical concern if one believes (as Simonson does) that peopledo not generally have utilities associated with specific valuesand that the ordering and the exact choice is influenced by thetask and context even for objects where people have inherentpreferences. Because the studies were not designed to shed anylight on the content of preferences and because the goldstandard of consistency can easily be shown to be violated forboth usual and unusual tasks, this criticism is correct but notrelevant to the discussion of inherent preferences.

Perhaps a more important criticism related to Simonson'sobservation about BDT using unusual choices is that violationsof consistency based on a lack of completeness were given ahigher status in the BDT literature than they deserve in theunderstanding of consumer preferences. If repeated demonstra-tions of such consistency violations in a wide range of domainsare uninteresting (because refuting completeness does notrequire such a large number of consistency violations and thecontent of preferences is not illuminated by these demonstra-tions), then a different motivation for studying them could bethat it helps researchers understand how decisions are made inreal world. We agree with Simonson that if the motivation is onhow the construction process or the specific phenomenonmanifests in the marketplace (e.g., which microwave is chosen),researchers should make a greater attempt to mimic themarketplace purchase context.

Simonson's second observation is that the field has deve-loped “phenomenon-specific” explanations for a set of effectsthat all seem to be rooted in the use of relative comparisonsamong the options provided at the expense of absolute(normative) evaluations. Simonson makes an important con-tribution in integrating these local explanations. Perhaps if thefield saw these many demonstrations of different phenomenaas linked to a common (relative versus absolute) framework,the focus might have shifted away from finding “new”

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demonstrations that violate completeness sooner and towardquestions relating to the specific content of preferences, howthey are formed, and how they change over time.

Putting the focus on “Preferences” in “Rational preferences”

We agree with Simonson that the BDT research programgot caught up in cataloging violations of consistency ratherthan examining other interesting questions about preferences,including the content of people's preferences. We furtheragree that questions relating to the content of preferences,inherent or otherwise, should be an important area of futureresearch, especially those that are hard for people toarticulate in the absence of actual experience (i.e. dormantpreferences). We are less certain that identifying inherentpreferences will play an important role in this enterprise forreasons we outline below. We next discuss the kinds ofresearch that could contribute to our understanding of thecontent of preferences.

While Simonson offers a definition of inherent preferences,he seems agonistic about whether these preferences are innate orlearned over time. Nonetheless, establishing the innate source ofa preference seems to be the least ambiguous way to identify aninherent preference. In an interesting study of risk aversion andaltruism, Cesarini, Dawes, Johannesson, Lichtenstein, &Wallace (2008) provide initial evidence in an experimentalsetting after controlling for environmental influence, thatpreferences have a genetic component. Note that much of theliterature on innate preferences focuses on preference content ata relatively high level of abstraction (e.g., risk, altruism) asopposed to product attributes (a 2-door versus a 4-door car) oreven the corresponding benefits associated with these attributes.This high level of abstraction is very important, as otherwise,the study of innate preference content may boil down to ameticulous cataloging of the list of ingredient attributespreferred by one individual versus another.

One challenge when identifying inherent preferences is thatpreferences that evolve over time may have been influenced bythe broader social and environmental context in the past.Because the field has under-examined the process by whichpreferences are learned, it would be very difficult to determinewhether any particular preference evolved without the influenceof incidental context sometime in the past. That is, it would bedifficult to determine whether any evolving preference isinherent or not. Moreover, the cataloging of such preferencesseems to have limited academic value. This is because it is hardlyin dispute that people differ in the content of their preferences(e.g., tea versus coffee drinkers). In fact, while academics maynot have studied such preferences, this is precisely whatmarketers do (under marketplace conditions) in order to identifythe best fit with customer needs, or what Simonson would callactive preferences, when designing products and services.Academics may be able to play an important role in thiscataloguing if it is done at a sufficiently high level of abstraction,and across both individuals and situations. For example,determining when preferences for hedonic over utilitarianfeatures will be expressed (cf. Dhar & Wertenbroch, 2000), or

who will generally have social-based versus status-basedpreferences may be sufficiently general to garner academicinterest.

The content of preferences that people cannot articulateprior to a relevant experience (Simonson's dormant prefe-rences) could also prove a fruitful area of research. Forexample, aesthetics in product design is seen as an importantdriver of purchase and consumption enjoyment but prefer-ences in this area are probably difficult for most consumers toarticulate or predict accurately prior to any exposure orexperience. Any empirical regularity in dormant preferencescould be used to enhance our understanding of how tradeoffsare made between active and dormant preferences prior tochoice, and why post-choice these dormant preferences maylead to dissatisfaction. It would also be very interesting toexamine the source of dormant preferences. If we are notaware of them and they apply to items that were neverexperienced, where did they come from?

Note that these dormant preferences could emerge immedi-ately upon exposure to a new product or they could emerge overa longer period of time. In the latter case, they might bechallenging to separate from constructed preferences. Forexample, Starbucks decision to launch coffee as opposed to teabars in China (a tea drinking nation) may succeed not because ofa dormant preference for coffee but because the combination ofthe set of product attributes (e.g., coffee made sweet), imageryfactors (e.g., Starbucks experience) that are associated with thebrand, and contextual factors (e.g. the framing of the choice) mayinduce the formation of a new preference for coffee. It is not clearhow to demonstrate that a preference that emerges over time isdecidedly inherent rather than constructed. Therefore, we believea focus on immediate rather than slowly revealed dormantpreferences would be particularly interesting.

There is some temptation to operationalize inherentpreferences as stable preferences. However, stability overtime could also arise from constructed preferences to theextent that the construction forces (e.g. contextual factors,accessible constructs, etc.) remain stable over time. Further-more, even inherent preferences may not be stable as peoplemay learn from new information or feedback (e.g. to be moreor less risk-taking over time). Similarly, it is not clear thatdifferential adaptation is evidence for the existence of aninherent preference. For example, recent research suggests thatmotivation can moderate whether repeated exposure leads toadaptation (Riis & McClure, in press).

Another complication in identifying inherent preferencescomes from the relationship between these preferences andconcrete choices. The same inherent preference can beexpressed in very different choices. For example, someonewho is an engineer may have an inherent preference forremarkably engineered devices. However, this inherent pre-ference could ultimately be expressed as a preference formechanical watches but not other equally impressive devicesbecause of the context in which these devices were exposed tothe individual. Thus, a preference for mechanical watches orphonographs may be based on the same inherent preferencethat is manifested in very different concrete preferences based

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on incidental exposure, culture, social interactions, and othercontextual variables. While these concerns call into doubt theusefulness of the label inherent preferences, they should notcast doubt on the enterprise of understanding the content ofpreferences.

While Simonson's characterization of BDT as obsessed withviolations of rationality principles is certainly accurate for themajority of work done by this field, there are some emergingtrends where the focus seems to be on ideas that are unrelated tothe economic benchmark. For example, there is a growingliterature examining how goals drive choices (e.g. Novemsky &Dhar, 2005; Fishbach & Dhar, 2005), and how sequentialchoices interact (e.g. Khan & Dhar, 2006, 2007). These streamsof research seek to identify broad regularities in the content ofexpressed preferences that have little to do with consistency orrationality more broadly.

Conclusion

Most BDT research in individual decision making hasfocused thus far on testing the consistency of preferences andidentifying boundaries of rationality as opposed an under-standing of the content of people's preferences. A reason fordoing so may be rooted in interdisciplinary nature of the fieldthat was guided by the formalization of preference relations andits utility representation in economics. The field may havefocused on this goal for so long at least in part because thearticulation of interesting questions about the content ofpreferences may be quite difficult, since mere documentationdoes not seem to spark academic interest. We applaud Simonsonfor his efforts to begin to identify interesting questionsconcerning the content of preferences. In this commentary, wehave attempted to provide additional ideas about what exactlymight be interesting academic questions for future research intothe content of preferences.

Acknowledgments

The authors thank Shane Frederick and Drazen Prelec forhelpful comments.

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