Consumer Information Processing and Decision-Making: Origins, Findings, Applications, and Future Directions

Abstract

The foundation of the Journal of Consumer Research (JCR) in 1974 marked the beginning of a field not yet wedded to a single research paradigm. Its inaugural issue was eclectic, covering topics from consumer economics to attribution theory, from family decision-making dynamics to statistical methodologies. But soon the information processing paradigm took center stage, with behavioral decision-making emerging as another significant perspective subsequently. This article focuses on the two paradigms, which are used by most consumer researchers to frame questions and explore problems in the field. Using these perspectives, consumer researchers have created foundational constructs and used them as independent and dependent variables, as well as mediators and moderators, in empirical studies.

In writing this article, I have engaged with leading scholars including (in order of mention) James Bettman, Chris Janiszewski, Jaideep Sengupta, Itamar Simonson, Christopher Hsee, Rebecca Hamilton, Wayne Hoyer, Tina Lowrey, Kevin Keller, Barbara Kahn, and Leonard Lee. I asked them about the origins and history of the two perspectives, about key findings, applications, as well as future directions of information processing and decision research.

CONSUMER INFORMATION PROCESSING

Mention consumer information processing, and one name alongside a seminal book emerges: James Bettman's (1979) “An Information Processing Theory of Consumer Choice.” The book was a landmark, a pivotal moment in our field. It was the first to synthesize diverse research strands.

The foundational concepts of consumer information processing had been established in cognitive psychology, following the so-called “computer metaphor” by analyzing inputs and outputs and information processing itself. Bettman's (1979) book, with its emphasis on consumer choice and information processing heuristics, significantly expanded and refined these existing concepts in a consumer context. Bettman also introduced new processes such as information processing heuristics and rigorously conceptualized the details of consumer memory, motivation, and choice. He viewed information processing as dynamic, interactive, and recursive. Moreover, Bettman proposed numerous hypotheses that would be empirically tested in subsequent research. In 1988, when I entered the marketing field after receiving a PhD in psychology from Cornell, many articles in JCR featured empirical studies on consumer memory, inference making, heuristics, attitudes, and their impact on intentions and behavior.

When I spoke with Bettman, he first recounted his student years at Yale, where he was initially drawn to “consumer economics” and soon interested in a broad spectrum of thought—from operations research to general problem solving to early work on artificial intelligence to constructive processing (Feigenbaum and Feldman 1963/1995; Neisser 1967/2014; Newell, Shaw, and Simon 1958). This led to a deep interest in understanding consumer decision-making processes. Bettman shared, “Back then, information processing was on the periphery.” He added, “I have always been inclined to synthesize, emphasize, and integrate.” These inclinations were realized in his book and further demonstrated through influential articles in JCR, particularly a seminal co-authored 1998 article on constructive consumer choice processes that fused information processing with the nascent field of behavioral decision-making (Bettman, Luce, and Payne 1998). Bettman was also a pioneer in methodology. During his doctoral research, he observed consumers in a Connecticut supermarket, encouraging them to “think out aloud” by verbalizing their thoughts during decision-making, a technique that would continue to inform consumer research. “It was awful from a methodological perspective,” he said, but it was a genuine attempt to understand consumer behavior in a naturalistic setting.

I also spoke with Chris Janiszewski and Jaideep Sengupta, two prominent scholars who have contributed important work to consumer information processing (Janiszewski 1993, 1998; Yan, Sengupta, and Hong 2016). Both interviews first focused on consumer attitudes. A persistent conundrum in attitude research is the tenuous link between attitudes and behavior. Janiszewski characterized this inconsistency vividly, “People purchase clothes they never wear, acquire food they never eat. This disconnect between attitudes and behavior persists, and we don't adapt. Even when we are sixty years old, we might buy clothes we never wear. So, why haven't we resolved this within ourselves?” From a business standpoint, Sengupta added, “Practitioners might well ask: what's the value of measuring attitudes, as is customary in market research, if they have only a slight correlation with behavior, especially purchasing?”

To bolster the weak attitude–behavior correlation, psychologists Ajzen and Fishbein advocated for a more nuanced measurement approach (Ajzen and Fishbein 1980)—assessing, for example, consumer attitudes not just toward a product but the act of purchasing it. This approach is effective because attitudes are not static but actively constructed (Schwarz 2007). Janiszewski explained, “My attitudes are formed as I think about food, when purchasing, and consuming it. These are distinct constructions. By adopting the perspective of the buying situation, one's purchasing decisions—and consequent consumption—are likely to be more accurate.” Research has also shown that attitudes easily accessed from memory have a stronger correlation with behavior (Fazio and Williams 1986). In consumer contexts, the implications are significant. Sengupta explained that in a shopping context, for example, “Those with less readily available attitudes tended to opt for items in the front row, for convenience, without considering their preferences. Conversely, those with more accessible attitudes were relatively more likely to choose from less proximal locations, exhibiting behavior more in line with their intrinsic preferences.” The field was further enriched by new insights on attitudes through the advancement of dual-processing models of persuasion, notably the elaboration likelihood model (Petty and Cacioppo 1986). Sengupta highlighted, “This model revolutionized our understanding, positing that persuasion hinges on the depth of message contemplation and is influenced by the motivation and capacity to process information.”

Consumer Decision-Making

In the late 1980s and early 1990s, a second major perspective emerged in consumer research: behavioral decision theory (BDT). Reflecting on the origins of BDT, Itamar Simonson observed, “You might recall, Bernd, coming from social psychology, the significance of attitudes and behavior in the seventies and the rise of the Petty and Cacioppo model in the eighties. Concurrently, decision making was gaining prominence, challenging the conventional economic theories like utility maximization.” Simonson mentioned that Huber, Payne, and Puto’s (1982) work on asymmetrically dominated alternatives had a great influence on his own thinking and work (Simonson 1989).

BDT researchers showed that consumers often violate normative, economic principles. Simonson noted, “Initially, highlighting the flaws in the classical economic model's assumptions was significant. However, as BDT evolved, merely pointing out these contradictions became less compelling. The emphasis shifted towards understanding how consumers actually render judgments and make decisions, reflecting real-world challenges.” Indeed, research on substantive issues has recently increased, and this shift from theoretical abstraction to tangible phenomena is also reflected in an increased publication of substantive phenomena papers in JCR.

Most BDT papers, like the above-mentioned work, are about context effects. I asked Simonson whether there could be a general model or general principles of behavioral judgments and decision-making. Simonson remains skeptical. “The idea that we could encapsulate decision-making principles into a single model seems unrealistic. However, in general, it seems that people prioritize relative over absolute values, which offers significant explanatory power.” Acknowledging this, I suggested, “Isn’t this a general principle?”

While the possibility of a comprehensive model is debatable, there seems to be agreement about the major effects that matter in judgment and decision-making (JDM) (Fischhoff and Broomell 2020). My conversations with Chris Hsee and Rebecca Hamilton focused on such major effects. Chris Hsee identified the asymmetric dominance effect, the compromise effect, temporal decision-making, different risk preferences in loss versus gain contexts, as well as the preference reversals between joint versus single evaluations studied by Hsee and Leclerc (1998). He also drew a distinction between two types of context effects—over-sensitivity effects (decision-makers let irrelevant context information influence their decisions) and insensitivity effects (decision-makers fail to incorporate context information that should influence their decisions). Hamilton expanded on context effects. “I see context effects as being so much broader than they were initially because we're not just talking about the immediate environment of the choice alternatives. More broadly, we're talking about the decision maker as being within a context and influenced by these variables.” Thus, context effects may also be social, including psychological distance, the influence of others, and conditions like scarcity or cognitive depletion.

The future of JDM research, as Hsee foresees, lies in integrating JDM with other research areas. This merger acknowledges the interconnectedness of JDM, information processing, and emotional factors, which historically have been treated as distinct areas of studies. Hsee also emphasized that the “ultimate goal” of JDM research is to enhance consumer welfare, such as aiding consumers in attaining greater satisfaction, rather than merely documenting phenomena. “The ultimate goal is to show why there are decisions that do not maximize well-being, and how we can help people make better decisions.” In this respect, Hamilton recommends mental simulation as a strategy for helping consumers use context to make better decisions (Hamilton 2015). “By imagining ourselves in a different decision environment, with technological assistance like augmented reality, for example, we can improve our decision making.”

APPLICATIONS

People become consumers when they operate within a marketplace. In this sense, consumer behavior is an applied field. My subsequent discussions concentrated on information processing and decision research in the areas of advertising, branding, and shopping. I had conversations with Wayne Hoyer about advertising broadly, Tina Lowrey about the linguistic elements of advertising, Kevin Keller about branding, Barbara Kahn about retailing, and with Leonard Lee on the subject of shopping in a wider context.

“Advertising has been studied forever,” Hoyer remarked. “And there have been major developments in advertising. In my opinion, the biggest development was the incorporation of involvement and the elaboration likelihood model.” Indeed, during the pivotal years of advertising research in the 1980s and 1990s, involvement emerged as a crucial concept, recognizing that often ad viewers are not deeply engaged. Consequently, they process advertisements very differently from highly involved consumers. Low-involved consumers are influenced by ads via a peripheral route rather than a central route that provides strong arguments. “A pivotal element in peripheral processing is the attitude toward the ad,” Hoyer said, referring to MacKenzie, Lutz, and Belch (1986) that prominently featured this idea. Referencing some of his own work (Elpers, Mukherjee, and Hoyer 2004), Hoyer said that through humor, music, and various other peripheral cues, marketers can enhance attitudes toward ads. Hoyer also spoke about another significant shift affecting information processing research on advertising. “During my doctoral studies in the seventies, the focus was solely on cognition. Emotions were not considered; every decision was presumed to be rational and cognitive.” He noted that over the years there has been a surge in emotion research, not just in advertising, but across all facets of information processing and decision-making (Pham 1998).

Language is intricately linked to advertising due to the presence of text, whether written or spoken (Lowrey 2020). Lowrey explained that linguistic research on advertising considers “various factors like rhyming, types of rhyming, metaphors, and the like.” Lowrey is particularly intrigued by the analysis of language in ads through a socio-linguistic lens, such as “the study of gender associations in language, for example, research on feminine versus masculine brand names.” Another important area concerns cross-cultural differences and the impact of different languages on perceptions. “Much of our knowledge is based on English, but there’s more to study, not only in other languages but also in different writing systems.” Recently, language research has seen a revival, with Lowrey anticipating that “with advancements in artificial intelligence, machine learning, ChatGPT, and other new technologies, it will be a vibrant topic for the foreseeable future.”

Branding, closely intertwined with advertising, has evolved significantly, especially in the latter half of the twentieth century. Kevin Lane Keller noted, “In the eighties, there were many mergers and acquisitions, and companies were paying large premiums for brands, and to leverage their assets, brands were being extended into new categories and markets. There really hadn't been that much academic work done yet, but there were a lot of angles from which to explore brands based on theories and concepts from consumer psychology, sociology, economics, and so on. So it just really created this exciting research area.” A seminal study in branding was Aaker and Keller’s (1990) study of consumer evaluations of brand extensions. Keller and others also studied brand associations, personality, relationships, and experiences (Keller 2003). So, what is there left to explore in branding? “There is so much still to learn! We must study how brands actually operate in people's lives. The notion of brand permission, and what kinds of things consumers want brands to do and not to do. Another largely neglected issue is brand platforms, portfolios and architecture. It’s an extremely important industry issue.”

In conversation with Barbara Kahn about retailing research, Kahn noted that historically the focus of retail research was product-centric, for example, merchants might be in interested in optimal assortment size and variety (Kahn and Wansink 2004). Although product and merchandizing issues are still important, Kahn said “Today, we’re studying what I describe as ‘the connected consumer.’” Current consumers are not confined to traditional shopping; they are immersed in e-commerce, engaged in live streaming, influenced by social media, and persuaded by influencers (Kahn, Inman, and Verhoef 2018). Researchers now probe these modern phenomena, and areas once studied in isolation are converging. “Now you're seeing the merging of retailing and advertising. So that's the new focus of the research. And now we're looking at the customer experience in the store and online, subscriptions, loyalty, engagement, and research focuses on that.”

Methodological approaches have also evolved since the 1980s and 1990s, when scanner data and experiments predominated. Retailing has become a domain characterized by multi-methods approaches. Kahn anticipates that significant technological advancements like AI and blockchain will revolutionize retailing again, with products being tracked and uniquely identified, consumers participating as co-creators, and stores transforming into showrooms and entertainment spaces to accentuate the brand. These shifts will lead to new research and create fresh insights into consumer behavior in retail spaces. “This implies that the main goals of shopping have changed over time and may change further in the future. In the past, it seemed shopping is about making transactions. But consumer research has shown that shopping is a more complex and multi-faceted phenomenon.”

Lee, who works and lives in Singapore, a hub for retail and shopping, elaborated on what he and others call “shopping goals” (Lee and Ariely 2006). “Many of these goals depart from the standard kind of stylized model of, you know, attention leads to interest to desire and action. There's a host of goals and activities that consumers could engage in when they shop.” These goals change how consumers process information and make shopping decisions. “A utilitarian goal is obviously to buy something. But take retail therapy: to alleviate some negative feelings that you have. Or a social goal like gifting.” Lee mentioned that shopping can also be a compensatory activity for consumers feeling a lack of control. He referred to a paper (Chen, Lee, and Yap 2016), indicating that when consumers sense a loss of psychological control, they tend to buy more practical products that symbolize problem-solving, potentially restoring their sense of agency.

I noted to Lee that Simonson, Hsee, and Hamilton had shared insights on context effects in decision-making. When asked about the most significant contextual factors in shopping, Lee emphasized the social context. For example, the mere presence of other shoppers can alter consumer emotions and purchasing choices (Dahl, Manchanda, and Argo 2001). Lee also noted the unique aspect of shopping research: it is often conducted in real-world settings, like field or observational studies.

Regarding the future of shopping research, Lee speculated on how emerging technologies such as the metaverse and AI might serve as shopping aids and influence consumer behavior, and even how shopping could contribute to health. “We live in a world where people have put a lot of focus on broader issues like technology and environmental sustainability and health and longevity. For example, the social benefits of spending time with your friends and your loved ones. It's actually a source of physical activity and a social bonding activity. Shopping really encompasses a broad range of activities and also potentially a broad range of benefits.”

CONCLUSION

My interactions with these experts in consumer research convinced me of the significant strides that we made in developing theory on consumers and consumption in the marketplace with information processing and decision research. Not only have these perspectives created valuable theoretical insights, but they have also helped us frame and address questions on advertising, branding, and shopping. New societal and technological shifts will give rise to fresh inquiries and research avenues in this dynamic field of consumer research.

Several papers in the 50 Year Special Anniversary Issue of JCR provide further details and additional insights into the issues discussed in this article. Specifically, in their discussion of fifty years of context effects, Evangelidis et al. (2024) present a much-needed integration of behavioral and quantitative perspectives. Khamitov et al. (2024) conduct a meta-analysis of fifty years of research on a key behavioral construct: consumer trust. Packard and Berger (2023) review the evolution and emergence of language research in consumer behavior. Finally, du Plessis, D’Hooge, and Sweldens (2024) present a new model that links brand associations to learning.

Author notes

Bernd Schmitt (bhs1@gsb.columbia.edu) is Robert D. Calkins Professor of International Business, Columbia Business School, New York, NY 10027, USA.

The author thanks the experts interviewed for this article for their insights.

REFERENCES