An Econometric Examination of the Behavioral Perspective Model in the Context of Norwegian Retailing
Sigurdsson, Valdimar, Kahamseh, Saeed, Gunnarsson, Didrik, Larsen, Nils Magne, Foxall, Gordon R., The Psychological Record
According to the behavioral perspective model (BPM; Foxall, 1990) of consumer choice, the consequences of buying behavior fall into different utilitarian and informational consequences. These consequences can be reinforcing or punishing and consist of functional (utilitarian) and symbolic (informational) outcomes of buying and consumption. The BPM retailing literature is built on extensive empirical research and techniques that were originally refined in choice experiments in behavioral economics and behavior analysis, and then tested mostly on British consumer panel data (e.g., Foxall, & Schrezenmaier, 2003; Foxall, Oliveira-Castro, & Schrezenmaier, 2004; Oliveira-Castro, Foxall, & Schrezenmaier, 2005, 2006).
A large number of different behavioral-economic equations has been tested from the perspective of the BPM (e.g., Curry, Foxall, & Sigurdsson, 2010; Foxall, James, Oliveira-Castro, & Ribier, 2010), but the equations tested in this study, in the context of Norwegian retailing, stem from the relative demand analysis, RDA (Foxall & James, 2001), incorporating utilitarian and informational reinforcement (UR and IR). The BPM states that the higher the UR and IR and the lower the aversive consequences (generally, pricing and effort), the larger the economic value of the brand and, therefore, the higher the relative amount bought of the brand within the product category. We tested these theoretical predictions based on the analysis of buying behavior of brands for 10 different product categories, some of which were the same categories tested in the previous UK panel studies (biscuits, butter, fruit juice; see Table 1). The main purpose of the study was to test whether different product categories' market "structure" can be described mathematically with the same equation. Therefore, our contribution to the literature includes an extension of research on RDA to a new country (Norway), using new type of data directly derived from the retailer. Furthermore, we are testing some of the product categories that were previously investigated but are also extending to even more product categories.
The rest of the study is structured as follows. First, we introduce the BPM, because this research is testing the consumer model on a new type of data and in a different setting--Norwegian retailing. We then discuss behavioral economic research in retailing, focusing on the particular analytical method used--the RDA. We discuss the reasons for focusing on RDA instead of on other types of behavioral economic methodology and review previous research using RDA within the BPM framework. We end the introduction by stating the research proposition.
A Behavioral Economic Model of Consumer Choice
Consumer behavior analysis employs the BPM as an explanatory framework that provides an interpretation of consumer behavior in which the three-term contingency discriminative stimulus, operant response, and reinforcer or punisher of behavior analysis--are adapted to the particular demands of interpreting consumer behavior in open settings that arise within modern market-oriented economies. According to the BPM, discriminative stimuli and motivating operations work on operant response comprising the consumer behavior setting, which combines with the consumer's learning history to form the consumer situation, the immediate predecessor of consumer behavior in a natural setting. Consumer choice takes place based on the notion that consumer behavior is performed within simultaneous reinforcing and punishing consequences. Based on the BPM, the consequences of consumer behavior include UR, IR, and aversive outcomes, such as costs of purchase and consumption (see Figure 1). It is assumed that virtually all products deliver all these consequences, in different combinations, and this can be referred to as leading to different patterns of reinforcement, as has been revealed in previous research, in which UR and IR have been categorized into different levels (e. …