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Preference Formation

The concept of preference formation deals with two questions that are basic in social psychology and philosophy, of some importance in consumer research and political science but of explicit disinterest in mainstream economics: how preferences are acquired and how they are modified. Preference is a concept that assumes a real or imagined “choice” or active selection between alternatives according to a rank ordering based on their respective values or utilities. Preferences are defined as primarily affectively based behavioral phenomena and a major source of motivation. Preferences exhibit themselves not so much in what the individual thinks or says about the object but how he or she acts toward it—that is, approaches it, buys it, and uses it.

Most of the literature on preferences has a strong cognitive emphasis. In consumer decision models, the antecedents of preferences are attitudes. These can be formed without affective supports (such as parental reinforcement, social conformity pressures, identification with the group) solely by means of cognitive factors, for instance, consumer information from credible sources. This also reflects the view, dominant in psychology until recently, that cognition must precede affect. This view has lately been challenged by neuroeconomics and behavioral studies in emotions. Attitudes will usually involve both cognitive and affective components. Knowledge or cognition without affect and emotion lacks its motivational drive.

Preference Formation in Consumer Research

Preferences are, most prominently, analyzed in consumer research on attitudes, impression formation, and decision making. The literature offers a continuum where preferences range from consistent, meaningful, and relatively long lasting to nebulous, spontaneously constructed, and unreliable.

In cognitive consumer theory, preferences are conceptualized as the subjective counterparts of object utilities. Both preferences and utilities are understood by decomposing the overall utilities into elementary complements. A preference of X over Y can here be fully explained by the weighted preferences for the components of X and Y. To change a given preference, it is first necessary to identify the features of the object and then try to influence the person's evaluation of these features. Following this tradition, preference formation is seen as a crucial step in the multistage process of consumer decision making: to make a choice from an assortment of product or service alternatives, the key is that consumers have well-developed preferences regarding attribute levels and have formulated tradeoffs on the relative importance of these attributes.

A contrasting view suggests that consumers do not have well-developed preference functions prior to entering the market, except for some basic and frequently encountered products. Instead, they usually construct their preferences at the moment of choice and herewith succumb more or less voluntarily and knowingly to a variety of contextual factors and stimuli. The truth lies probably in a synthesis: one can view consumer preference as a combination of context-independent (“inherent”) preferences and context-dependent (“constructed”) preferences. The former are based on long-term dispositions underlying these inherent preferences, assumed to reside within a person over an extended period; they are rather stable and change only slowly over time; the latter, by contrast, change rather quickly, sometimes just due to a stimuli at the point of sale.

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