downsize in 3d, supersize in 1d: effects of dimensionality on … · 2016-11-30 · the obesity...

1 INSEAD Prof. Pierre Chandon

Downsize in 3D, Supersize in 1D: Effects of Dimensionality on Size

Estimation, Size Choice, and Quantity Discount Expectation

Pierre ChandonNailya Ordabayeva

INSEAD Behavioral Brown Bag SeminarSeptember 25, 2007

Agenda

BackgroundThe obesity epidemicSupersized and downsized portions and packages

Conceptual frameworkThe power law of perceptionEffect of object dimensionality

2 Lab studiesStudy 1: Size estimation Study 2: WTP and debiasing effects of objective size information

2 Field studiesStudy 3: Effects of pack dimensionality on consumers’ supersizing decisionsStudy 4: Effects of pack dimensionality on consumers downsizing decisions

Conclusion


The Obesity Epidemic

In the US:- In 2002, 2/3 of adults are overweight

and 30% are obese (vs. 15% in 80’s). - Medical expenditures due to

obesity: $80-100B per year.- Severe economic and social

discrimination of obese people.

One Likely Reason: Supersized Packages

52 oz (1.8 l) 32 oz (1.1 l) 44 oz (1.5 l)

390Super Size, 42 fl oz

310Large, 32 fl oz

210Medium, 22 fl oz

150Small, 16 fl oz

CalsServing Size

600 calories


Triple Bypass Burger "Taste Worth Dying For®."

(8,000 calories)

Downsizing to Attract Restrained Eaters and Pre-empt Adverse Regulations

51% of Americans (63% of women) believe that portion sizes in restaurants are too big

Mixed ResultsRuby Tuesday: in 2004 downsizing (pasta, French fries and some entrees) led to 5% sales dip and eventual failure of the strategy after just 5 months. Recovered by offering excess portions.

TGI Friday: 10 entrees sold in portions about 30% smaller and priced about one third less than regular entrees


Downsizing for Environmental Reasons

Wall-Mart is forcing 66,000 suppliers to decrease packages 2025, it plans to package decrease of 5% by 2013.

33 Cl

33 Cl

25 Cl 25 Cl

Questions

Research questionsHow does the dimensionality (1D vs. 3D) of changes in portion and package sizes influence:

The elasticity (accuracy) of people’s size estimations.

Their willingness to pay for increasing sizes.

Their choice between regular and supersized or downsized portions and packages.

Does providing objective size information (weight, volume) reduce the dimensionality effects?

Are quantity discount expectations (of lower unit price for larger sizes) mediated by consumers’ biased size estimations?

Managerial and public policy questionsShould companies downsize and supersize portions and packages in 1D or in 3D?

What would be the public policy recommendations?


Size estimations follow a power

function of actual sizes (Plateau

1872; Stevens 1986):

ESTSIZE = a*(ACTSIZE)b

Size estimations are inelastic

(b<1): People underestimate size

change.

0

500

1000

1500

2000

2500

3000

0 500 1000 1500 2000 2500 3000

Actual SizeE

stim

ated

Siz

e

Conceptual Background:The empirical law of sensation

b = .7

b = .9

b = .6

Object shapes influence the

elasticity of size estimations

(Teghtsoonian 1965; Frayman

and Dawson 1981).

For lines: b ≈ 1.0.

For spheres: b ≈ 0.8.

For cubes: b ≈ 0.7.

Hypotheses

People’s size estimations and their willingness-to-pay for increasing sizes follow inelastic power functions.

Size estimations are even less elastic when sizes change in 3D (e.g., height and diameter) than when they change in 1D (e.g., only height).

Providing objective volume information does not completely eliminate the effects of dimensionality on willingness-to-pay.

People are more likely to choose the supersizedalternative when it is supersized in 1D vs. 3D.

People are more likely to choose the downsized alternative when it is downszied in 3D vs. 1D.


Study 1: Effects of Dimensionality and Size EstimationsGoal

Effect of dimensionality on size estimations of packages that change along 1D vs. 3D.

6 x 2 mixed designWithin subjects: 6 sizes (doubling rule: A:50g, B:100g, C:200g, D:400g, E:800g, F:1,600g)

2 dimensionality conditions (between subjects: 1D (height) or 3D(height and diameter).

Procedure60 participants asked to estimate the size (in grams) of 5 increasing sizes of the same candle.

The size of the smallest candle was given (A:50 grams).

Participants saw pictures of the candles.

Size F (Manipulated between Subjects)


Size E (Manipulated between Subjects)

Size D (Manipulated between Subjects)


Size C (Manipulated between Subjects)

Size B (Manipulated between Subjects)


Size A (Manipulated between Subjects)

STUDY 1 Results:Size Estimation (observed geometric means, 95% confidence intervals, and model predictions)

Within-subjects results:

1D: 45% of participants have unbiased estimates (b = 1).

3D: 7% of participants have unbiased estimates (b = 1).

Other results:

Interaction of dimensionality and size effects significant (p < .05).

Power model fits better than linear models (AIC and MAPE).

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0 200 400 600 800 1000 1200 1400 1600 1800 2000Actual size (grams)

Estim

ated

siz

e (g

ram

s

Unbiased estimation1D (observed)1D (predicted)3D (observed)3D (predicted)

b = .87

b = .63


STUDY 2: Effects of Dimensionality and Size Information on Size Estimations and WTPGoal

Effect of dimensionality on WTP (due to size estimations?), effect of objective size information, real product representations, products pre-tested for alternative quantity discount explanations

Design

Within subjects: 6 sizes (same as in Study 1).

Between subjects: 2 x 2 with one control condition:

2 within-subjects replications: 2 non-food categories: dishwashing detergent and wool.

3D with size information

1D with size information

Control (size information only)

3D without size information

1D without size information

Procedure

Size and price of Size A were provided.

162 participants provided size and willingness to pay for sizes B to F

Order of dependent variable counterbalanced.

Participants could see and touch the actual products.

Study 2: Selected Stimuli (Sizes A, C, and E)

Dishwashing

powder

Wool

1D Condition 3D Condition


STUDY 2: SIZE ESTIMATIONS ACROSS REPLICATIONS (No Size Information Condition)

.61b.94aWool

.75b.92aDet.

3D1D

Within-subjects results:

1D: 45% are unbiased.

3D: 7% are unbiased.

Other results:

Interaction (p < .05) for both products.

Power model fits better than linear models for both products (AIC and MAPE).

0

4

8

12

16

20

24

28

32

36

0 4 8 12 16 20 24 28 32 36

Actual volume (multiple of the smallest volume)

Estim

ated

siz

e (re

scal

ed)

Unbiased estimation

1D (observed)

1D (predicted)

3D (observed)

3D (predicted)b = . 93

b = . 68

STUDY 2: WILLINGNESS TO PAY ACROSS REPLICATIONS WITHOUT OBJECTIVE VOLUME INFORMATION

0

4

8

12

16

20

24

28

32

36

0 4 8 12 16 20 24 28 32 36

Actual size (rescaled)

Will

ingn

ess

to p

ay (r

esca

led

pric

e)

Unbiased estimation

1D (observed)

1D (predicted)

3D (observed)

3D (predicted)

b = .72

b = .56


0

4

8

12

16

20

24

28

32

36

0 4 8 12 16 20 24 28 32 36

Actual size (rescaled)

Willi

ngne

ss to

pay

(res

cale

d pr

ice)

Unbiased estimation

control (observed)

control (predicted)

1D (observed)

1D (predicted)

3D (observed)

3D (predicted)

b = . 83

b = . 69

b = . 83

STUDY 2: WILLINGNESS TO PAY ACROSS REPLICATIONS WITHOUT OBJECTIVE VOLUME INFORMATION

Mediation:

Dimensionality Size estimation WTP

22.00**Wool

26.74**Detergent

Sobel test statistic

Study 3 (Field Experiment): Choice between Regular Size and Supersized DrinksGoal

Effect of dimensionality on real choice of supersized packages, more familiar sizes

Field experiment with 3 between-subjects conditions

Both brands regular size; target brand supersized in 1D; target brand supersized in 3D.

Procedure

3 stands selling beer and cider to MBA students before viewing event.

Participants chose between 2 brands of beer and 2 brands of cider.Prices were constant across the dimensionality conditions.

N = 43 (given their preferred choice for free in the amphitheater).

Mugs or bowls provided to illustrate drink sizes.

Control condition 1D Supersizing condition 3 D Supersizing condition

22 Cl, €1.2022 Cl, €1.20

33 Cl, €1.20 22 Cl,

€1.2033 Cl, €1.20


STUDY 3: EFFECTS OF DIMENSIONALITY ON THE CHOICE OF THE SUPERSIZED BRAND (CHOICE SHARES AND 95% CONFIDENCE INTERVALS)

68%55%

100%

0%

25%

50%

75%

100%

Control (regular size) 1D supersizing 3D supersizing

Cho

ice

shar

e of

the

supe

rsiz

ed b

rand

GoalEffect of dimensionality on the choice of downsized food and beverages, WTP for regular-sized brand (reference effect), available packages

Field experiment with 2 between-subjects conditionsTarget brand downsized in 1D compared to the original menuTarget brand downsized in 3D compared to the original menu.

Procedure:Participants see a “menu” of 50 Cl Diet and regular Coke (target option) and 94 Cl Baseball and Baff (target option).After the task, the original 50 Cl regular Coke and 94 Cl Baff popcorn are unavailable.Participants choose between a 50 Cl Diet Coke and 33 Cl regular Coke (downsized in 1D or 3D) and 94 Cl Baseball popcorn and 63 Cl Baff popcorn (downsized in 1D or 3D).Willingness-to-pay for the non-target option (50 Cl Diet Coke and 94 ClBaseball popcorn).N =94 (participants walk out with their choices).

Study 4 (Field Experiment): Choice between Regular Size and Downsized Foods


Study 4 (Field Study): Stimuli

Original menu (to set expectations, no choice recorded)

1D downsizing condition 3D downsizing condition

50 Cl, €.80

50 Cl, €.60

50 Cl, €.80

33 Cl, €.60 50 Cl,

€.8033 Cl, €.60

STUDY 4: EFFECTS OF DIMENSIONALITY ON THE CHOICE OF THE DOWNSIZED BRAND AND THE WILLINGNESS-TO-PAY FOR THE REGULAR-SIZED BRAND

48%

69%

€ 1.10

€ .86

0%

25%

50%

75%

100%

1D dow nsizing 3D dow nsizing 1D dow nsizing 3D dow nsizing

Choice of the dow nsized brand Willingness-to-pay for theregular-size brandC

hoic

e sh

are

of th

e do

wns

ized

bra

nd

.00 €

.30 €

.60 €

.90 €

1.20 €


Implications for Research

Psychophysics of portion and package sizesThe elongation bias is a specific case of the more general dimensionality effect (e.g., less accurate size estimations for cubes than for squares with same elongation).

Dimensionality explains differences in size estimations across shapes, for both food and non food products.

Power curves enable to make point estimates of perceived size for any actual size, and hence to estimate actual sizes from estimates.

Psychophysics of quantity discount expectationsWillingness to pay follows an inelastic power curve of actual product size.

Expectations of quantity discounts for larger sizes are explained, in part, by biased size estimations.

Providing objective size information reduces consumers’ expectations for quantity discounts, but does not eliminate them.

Implications (continued)

Implications for ManagersTo increase purchase and consumption volume:

Supersize portions and packages in 1D.

Downsize portions and packages in 3D.

To reduce quantity discounts for larger sizes:Make objective size information more salient.

Implications for public policyTo help consumers make better informed size decisions, make objective size information as salient as possible (e.g., add grams on the menu).

Implications for future researchDimensionality effects on prices (e.g., multi-part prices vs. single-dimension prices) and other attributes (quality?).

Study when companies should pass unit prices changes to their customers through price vs. size changes.


Future Research

Magnitude production instead of magnitude estimation

Consumption of harmful products

Field study of quantity discounts in stores

Effect of dimensionality of attributes (e.g. prices) on choice and WTP

downsize in 3d, supersize in 1d: effects of dimensionality on … · 2016-11-30 · the obesity...

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