This Is Your Brain in the Supermarket

Say you’re out shopping for basic household goods — perhaps orange juice and soup. Or light bulbs. How do you choose the products you buy? Is it a complicated decision, or a simple one?

According to research done at the Massachusetts Institute of Technology and published in the journal Marketing Science in March 2015, It could be complex. Factors like price, quality, and brand loyalty may run through your mind. Indeed, some scholars have developed complicated models of consumer decision-making, in which people accumulate substantial product knowledge, then weigh that knowledge against the opportunity to explore less-known products.

A release from MIT notes that the researchers suggest that your brain is making a simpler calculation when you shop: You are most likely deploying an “index strategy,” a straightforward ranking of products. It may not be an absolutely perfect calculation, given all the available information, but the study suggests that an index strategy comes very close to being optimal, and is a far easier way for consumers to make their choices.

The release quotes John Hauser, the Kirin Professor of Marketing at the MIT Sloan School of Management and a co-author of the new study, as saying, “The advantage of making a slightly better decision wouldn’t be worth it.” Rather, he asserts, a simple index strategy “is going to get you really pretty close to an optimal decision at a much lower cost — both search cost and cognitive cost.” Basic rankings help you make quick decisions, and leave room to think about things other than your weekend shopping choices.

Typical models of consumer thought often treat the brain like an always-running computer, and hold that consumers constantly worry about the ways in which their choices interact. For instance: When considering one brand, these models posit that consumers are worried they will lose opportunities to learn more about other brands. The MIT team also believes that consumers accumulate information, but in a simpler, more intuitive way.

“When we look at our options, we normally evaluate them one by one,” says Juanjuan Zhang, an associate professor of marketing at MIT Sloan and another co-author of the study. “We would argue that that is the way we think, and that is different from how other models in marketing work.”

No space for PSPACE

The co-authors are MIT doctoral candidate Song Lin, Zhang, and Hauser. The paper is entitled “Learning from Experience, Simply”.

The study described in the paper is explicitly intended to bridge the gap between empirical studies of consumer decision-making and mathematical models in the field. Hauser, Lin, and Zhang suggest that some models of consumer thought are “PSPACE-hard” — that is, so mathematically difficult as to be virtually unsolvable even with the fastest computer, where the number of steps needed to find a solution is a direct function of the problem’s size.