TITLE:
Analysis of Preference Formation Using Experience Information
AUTHORS:
Tadashi Yagi
KEYWORDS:
Preference Formation, Experience, Unconsciousness, Emotion
JOURNAL NAME:
Modern Economy,
Vol.9 No.3,
March
26,
2018
ABSTRACT: In this paper, we
hypothesize that unconscious biases are formed through life experience, and we
formalize the process of preference formation mainly focusing on emotional
factors. Based on this underlying model, we implement an empirical model and
examine the relation between experience and preference formation using a
dataset compiled by the NTTDATA Institute of Management Consulting, Inc. The
analysis showed that there are strong relations between experiences and
preferences, especially when the emotional impact of the experiences seems to
be strong. The results of the empirical analysis are consistent with this
intuition and give us various insights into the mechanism of preference
formation. It is important to note that around 60% to 80% of experiences are
statistically significant in explaining the formation of preference, and the number
of significant variables increases when the preference is influenced by intense
experiences, as is the case for the preference high quality or ecological
options. This supports the intuitive idea that emotionally strong experiences
have a strong influence on the formation of unconscious biases. This study
gives us various kinds of insights into the marketing strategies. Especially,
the analysis on the formation of preference by experiences in life helps to
provide advertisement information with strong appeal to each consumer.