Experiments on consumer preferences and decision making

Consumers are not as rational as assumed by conventional economic theories. The present thesis reports three studies of consumers’ bounded rationality. It has three chapters. In Chapter 1, I investigate the effects of a range of different types of anchor on WTP and WTA valuations of familiar consumer products, elicited through individuals’ buying or selling decisions at given prices. I find anchoring effects only when the anchor value is framed as a plausible price for the good for which the individual is a potential buyer or seller. Anchoring effects are stronger for WTA than for WTP. I conclude that anchoring effects can affect market behaviour, but that not all anchors are equally effective. In Chapter 2, I demonstrate a set of three experiments and find that consumers are likely to stick to defaults and achieve suboptimal outcomes. I unpack two key psychological reasons why they do this - complexity (in terms of non-linearity, number and bundling of tariffs) and consumer inattention. The complexity induced by product bundling, non-linearity and number of tariffs has an important role, but this is overstated if the explanatory power of inattention is neglected. I show that a ‘smart nudge’ policy of automatically switching default tariffs can be used to exploit inattention-based consumer inertia to achieve better consumer outcomes. In Chapter 3, I report an experiment in which participants faced purchasing decisions involving complexity and common standards. The majority of participants employed the "dominance editing" (DE) heuristic. However, for cognitively constrained participants, the DE heuristic is less efficient than an alternative shortlisting heuristic - the "largest common standard" (LCS)

Group behaviour in tacit coordination games with focal points – an experimental investigation

This paper reports an experimental investigation of Schelling’s theory of focal points that compares group and individual behaviour. We find that, when players’ interests are perfectly aligned, groups more often choose the salient option and achieve higher coordination success than individuals. However, in games with conflicts of interest, groups do not always perform better than individuals, especially when the degree of conflict is substantial. We also find that groups outperform individuals when identifying the solution to the coordination problem requires some level of cognitive sophistication. Finally, players that successfully identify the solution to this game also achieve greater coordination rates than other players in games with a low degree of conflict. This result raises the question of whether finding the focal point is more a matter of logic rather than imagination as Schelling argued

Do consumers take advantage of common pricing standards? An experimental investigation

Gaudeul and Sugden have hypothesized that, when some but not all competing products are priced in a common standard, consumers who are liable to make errors in cross-standard price comparisons use decision rules that discriminate in favour of common-standard offers. Such behavior incentivizes sellers to use common standards. We report an experimental test of this hypothesis, using choice tasks similar to those represented in the Gaudeul–Sugden model. We found that offers priced in common standards were more likely to inspected but less likely to be chosen, and that subjects gained little benefit from common pricing standards that applied to some but not all offers. Most subjects used ‘dominance editing’ operations which eliminated transparently dominated offers, either as an initial shortlisting device or while offers were being sorted. Because these operations discriminate against common-standard offers, their use incentivizes sellers not to use common standards

The pizza night game: Conflict of interest and payoff inequality in tacit bargaining games with focal points

We report the results of a new tacit bargaining experiment that provides two key insights about the effects of payoff inequality on coordination and cooperation towards efficient outcomes. The experiment features the novel Pizza Night game, which can disentangle the effects of payoff inequality and conflict of interest. When coordination relies on focal points based on labelling properties, payoff inequality does not interfere with the successful use of those properties. When there are efficiency cues that assist coordination, payoff inequality is not an obstacle to the maximisation of efficiency. Conflict of interest is the main barrier to successful coordination

Groups with at most 13 nonpower subgroups

For a group G and positive interger m, Gm denotes the subgroup generated by the elements gm where g runs through G. The subgroups not of the form Gm are called nonpower subgroups. We extend the classification of groups with few nonpower subgroups from groups with at most 9 nonpower subgroups to groups with at most 13 nonpower subgroups.Comment: 16 pages, 0 figure

Novel insights into the Thaumarchaeota in the deepest oceans: their metabolism and potential adaptation mechanisms

Background: Marine Group I (MGI) Thaumarchaeota, which play key roles in the global biogeochemical cycling of nitrogen and carbon (ammonia oxidizers), thrive in the aphotic deep sea with massive populations. Recent studies have revealed that MGI Thaumarchaeota were present in the deepest part of oceans - the hadal zone (depth > 6,000 m, consisting almost entirely of trenches), with the predominant phylotype being distinct from that in the “shallower” deep sea. However, little is known about the metabolism and distribution of these ammonia oxidizers in the hadal water. Results: In this study, metagenomic data were obtained from 0-10,500 m deep seawater samples from the Mariana Trench. The distribution patterns of Thaumarchaeota derived from metagenomics and 16S rRNA gene sequencing were in line with that reported in previous studies: abundance of Thaumarchaeota peaked in bathypelagic zone (depth 1,000 – 4,000 m) and the predominant clade shifted in the hadal zone. Several metagenome-assembled thaumarchaeotal genomes were recovered, including a near-complete one representing the dominant hadal phylotype of MGI. Using comparative genomics we predict that unexpected genes involved in bioenergetics, including two distinct ATP synthase genes (predicted to be coupled with H+ and Na+ respectively), and genes horizontally transferred from other extremophiles, such as those encoding putative di-myo-inositol-phosphate (DIP) synthases, might significantly contribute to the success of this hadal clade under the extreme condition. We also found that hadal MGI have the genetic potential to import a far higher range of organic compounds than their shallower water counterparts. Despite this trait, hadal MDI ammonia oxidation and carbon fixation genes are highly transcribed providing evidence they are likely autotrophic, contributing to the primary production in the aphotic deep sea. Conclusions: Our study reveals potentially novel adaptation mechanisms of deep-sea thaumarchaeotal clades and suggests key functions of deep-sea Thaumarchaeota in carbon and nitrogen cycling

Compound games, focal points, and the framing of collective and individual interests

This study introduces the concept of “compound games” and investigates whether the decomposition of a game – when implemented – influences behaviour. For example, we investigate whether separating battle of the sexes games into a pure coordination component and the remaining battle of the sexes component changes coordination success. The literature attributes high coordination rates in pure coordination games with focal points to team reasoning and low coordination rates in related battle of the sexes games to level-k reasoning. We find that coordination success in compound games depends on the decomposition and order of component games

Adversarial Multimodal Representation Learning for Click-Through Rate Prediction

For better user experience and business effectiveness, Click-Through Rate (CTR) prediction has been one of the most important tasks in E-commerce. Although extensive CTR prediction models have been proposed, learning good representation of items from multimodal features is still less investigated, considering an item in E-commerce usually contains multiple heterogeneous modalities. Previous works either concatenate the multiple modality features, that is equivalent to giving a fixed importance weight to each modality; or learn dynamic weights of different modalities for different items through technique like attention mechanism. However, a problem is that there usually exists common redundant information across multiple modalities. The dynamic weights of different modalities computed by using the redundant information may not correctly reflect the different importance of each modality. To address this, we explore the complementarity and redundancy of modalities by considering modality-specific and modality-invariant features differently. We propose a novel Multimodal Adversarial Representation Network (MARN) for the CTR prediction task. A multimodal attention network first calculates the weights of multiple modalities for each item according to its modality-specific features. Then a multimodal adversarial network learns modality-invariant representations where a double-discriminators strategy is introduced. Finally, we achieve the multimodal item representations by combining both modality-specific and modality-invariant representations. We conduct extensive experiments on both public and industrial datasets, and the proposed method consistently achieves remarkable improvements to the state-of-the-art methods. Moreover, the approach has been deployed in an operational E-commerce system and online A/B testing further demonstrates the effectiveness.Comment: Accepted to WWW 2020, 10 page