Take 5: What Science Says about Your Summer Vacation
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Economics Marketing Jul 3, 2018

Take 5: What Sci­ence Says about Your Sum­mer Vacation

Kel­logg fac­ul­ty explore the psy­chol­o­gy and eco­nom­ics of com­mon trav­el conundrums.

Being uncomfortably hot makes us less likely to help.

Lisa Röper

Ah, sum­mer. Are you head­ed on a vacation?

Here is a sam­pling of research from Kel­logg pro­fes­sors to help you fig­ure out where to go and what to expect as you trav­el. Bön voyage!

1. Choose Your Locale

So, where should you go?

Sure, some of us are peren­ni­al beach peo­ple and oth­ers are always up for an adven­ture. But your choice of locale can also be influ­enced by the state of mind you’re in when you book your trip.

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Derek Ruck­er and a coau­thor found that feel­ing angry as com­pared to feel­ing sad can influ­ence a person’s choice of destination.

Pre­vi­ous research had shown that some emo­tions, such as anger and anx­i­ety, involve a state of high psy­cho­log­i­cal and phys­i­o­log­i­cal arousal, for exam­ple, an increased heart rate. Oth­er emo­tions, such as sad­ness and depres­sion, involve a state of low arousal.

So Ruck­er hypoth­e­sized that emo­tions with high arousal lev­els may sig­nal a desire for activ­i­ty, lead­ing peo­ple to pre­fer action-ori­ent­ed activ­i­ties, while emo­tions with low arousal lev­els would lead to a pref­er­ence for more pas­sive activities.

To test this, the researchers had col­lege stu­dents read pre­tend mag­a­zine arti­cles meant to induce either anger or sad­ness. Par­tic­i­pants were then pre­sent­ed with adver­tise­ments for two vaca­tion resorts in Orlan­do. One was described as a relax­ing spot, the oth­er as an active des­ti­na­tion. Par­tic­i­pants then rat­ed their pre­ferred vacation.

Indeed, those who had read the anger-induc­ing arti­cle pre­ferred the active resort while those who had read the sad arti­cle grav­i­tat­ed toward the relax­ing one. So if you’re try­ing to per­suade your part­ner to go sky­div­ing on your next trip, maybe refuse to do the dish­es for a week.

2. Assess­ing That Top 10 List

It’s time to research hotels. One promis­ing lodge says it is one of the top 10 for your des­ti­na­tion. Anoth­er one near­by says that it’s in the top 9. Which one are you drawn to?

Research from mar­ket­ing pro­fes­sor Kent Grayson and col­leagues shows that the incon­gru­ous­ness of a top-nine list means con­sumers are more like­ly to favor a top-ten prod­uct despite that chance that it is actu­al­ly worse than the oth­er option. 

The researchers found that con­sumers tend to pre­fer a select set of num­bers that mar­keters use all the time — ten, twen­ty, twen­ty-five, fifty, a hun­dred. This predilec­tion is so strong that a weak­er claim — top ten — can beat out a stronger one — top nine. Grayson and his col­leagues call this the com­fort tier” effect. 

While the com­fort-tier phe­nom­e­non may seem strange, Grayson and his col­leagues uncov­ered a sound expla­na­tion. Con­sumers have become accus­tomed to cer­tain bound­aries, so they give them lit­tle thought oth­er than to sim­ply accept that the prod­uct is among the best. This accep­tance is exact­ly what mar­keters want. 

But when a mar­keter choos­es an unex­pect­ed bound­ary — top sev­en or top six­teen, for exam­ple — the strange­ness makes con­sumers stop and think. And that pause is what mat­ters. It’s as if some­body pro­nounced a word wrong,” Grayson says. This momen­tary pause leads con­sumers to eval­u­ate the marketer’s inten­tions. They might try to tab­u­late the product’s pre­cise rank. It doesn’t take much for us to start reverse engi­neer­ing what the mar­keter has done,” Grayson says.

3. Bag­gage Fees and Behavior

Now it’s time to book your flight. And up pops the notice about the dread­ed bag­gage fee.

While they are an annoy­ance for most trav­el­ers, these fees prompt­ed a research study for Mar­tin Lar­iv­iere and Achal Bas­sam­boo, both pro­fes­sors of man­age­r­i­al eco­nom­ics and deci­sions sci­ences, and a col­league. They test­ed whether the extra fees help shape con­sumer behavior. 

There are, essen­tial­ly, two pos­si­ble ratio­nales for these fees. One is that they low­er air­lines’ oper­at­ing costs by shap­ing trav­el­ers’ behav­ior so they only bring car­ry-on bags. The oth­er is that they allow air­lines to charge dif­fer­ent cus­tomers dif­fer­ent prices accord­ing to cus­tomer characteristics. 

To test these ratio­nales, the researchers built an eco­nom­ic mod­el of air­line pric­ing and bag­gage fees. They found that this lat­ter ratio­nale does not hold up in prac­tice. (Check out the arti­cle to see why.) How­ev­er, they did find evi­dence for the for­mer ratio­nale. Explic­it­ly charg­ing for ancil­lary ser­vices like bag­gage rather than bundling the cost into the tick­et price is an effec­tive way to shape cus­tomers’ behav­ior and low­er the air­lines’ oper­at­ing costs, since air­lines need few­er check-in staff and lug­gage han­dlers, and planes use less fuel.

4. Lessons from Gas Sta­tions of Yore

Per­haps you’ll decide to dri­ve to your des­ti­na­tion. You prob­a­bly didn’t know that the gas sta­tions you will pass reveal an inter­est­ing eco­nom­ic les­son about demand shocks.

Demand shocks rep­re­sent a sud­den rise or drop in con­sumers’ desire to pur­chase a good or ser­vice. Empir­i­cal evi­dence of how com­pa­nies and indus­tries respond to demand shocks is hard to come by in large part because shocks, such as a par­tic­u­lar­ly effec­tive adver­tis­ing cam­paign, hap­pen every­where at once.

Strat­e­gy pro­fes­sor Thomas Hub­bard found inspi­ra­tion for a way to study demand shocks in mem­o­ries of fam­i­ly vacations.

When I was a kid rid­ing in the car to Flori­da, I-95 wasn’t com­plet­ed yet, and we had to take side roads,” he says. What, he won­dered, hap­pened to the gas sta­tions in towns after the inter­state arrived? I real­ized that these were demand shocks.”

Study­ing demand shocks to gas sta­tions dur­ing the con­struc­tion of the inter­state high­way sys­tem was use­ful because they’re observ­able many times over many years in many regions,” Hub­bard says. 

He com­bined gov­ern­ment data on gas sta­tions with data on when every mile of the inter­state opened. He also poured over old maps to fig­ure out what the best route was between two cities in the 1950s, before the inter­state arrived, then mea­sured how far that route was from the new interstate. 

Hub­bard found that when inter­states were built close to exist­ing roads, gas sta­tions respond­ed to the increased demand by expand­ing in size and hir­ing more employ­ees, but few addi­tion­al sta­tions were built. When a new inter­state opened sev­er­al miles or more from the pre­vi­ous high­way, entire­ly new gas sta­tions opened up to ser­vice the demand, but the size of exist­ing sta­tions stayed the same. 

The results sug­gest that entry oppor­tu­ni­ties in expand­ing mar­kets are not as sim­ple to exploit as they might seem. 

You have to pay atten­tion to where the demand growth is hap­pen­ing,” he says. If you have more cus­tomers demand­ing the same stuff than they did before — like more dri­vers stop­ping for gas on an inter­state very close to an exist­ing high­way — this doesn’t rep­re­sent a great chance for new firms to come in. If you want to meet that addi­tion­al demand, you’re prob­a­bly going to have to replace one of the exist­ing firms, not coex­ist with it.” 

5. Too Hot to Help?

Ahhh, you’re final­ly where you want to be. Did you go some­where toasty? If so, you might be dis­ap­point­ed in the cus­tomer ser­vice you expe­ri­ence there. 

That’s what Maryam Koucha­ki and a coau­thor found when com­par­ing cus­tomer ser­vice data from two sum­mers in Moscow — one of which had a heat wave that kept tem­per­a­tures over 100 degrees Fahren­heit for weeks. The fol­low­ing sum­mer, tem­per­a­tures returned to normal. 

Koucha­ki and a coau­thor won­dered whether proso­cial” behav­iors — help­ful, eth­i­cal acts for which peo­ple are not explic­it­ly reward­ed — took a hit dur­ing the swel­ter­ing temperatures. 

Indeed, they found that cus­tomer ser­vice was far worse in Moscow stores dur­ing the hot sum­mer. After con­trol­ling for the num­ber of sales staff on duty, the researchers found that employ­ees were more than twice as like­ly to offer help to cus­tomers dur­ing the cool­er sum­mer than dur­ing the swel­ter­ing one.

The dele­te­ri­ous effects of heat are not lim­it­ed to cus­tomer ser­vice. The researchers found that high tem­per­a­tures also impact the proso­cial behav­iors of col­lege stu­dents sit­ting in class­rooms. They were less like­ly to vol­un­teer to fill out an option­al sur­vey if they were in a toasty room. 

Peo­ple know they are expect­ed to dis­play pos­i­tive atti­tudes and help the client or their instruc­tor,” Koucha­ki says, but because of dis­com­fort, your cog­ni­tive resources are deplet­ed, so you have less abil­i­ty to reg­u­late your emo­tions.” In oth­er words, with your mind so pre­oc­cu­pied with its own com­fort, your self-con­trol plum­mets, mak­ing it hard­er to muster the good will it takes to help others.

Featured Faculty

Achal Bassamboo

Professor of Operations

Kent Grayson

Associate Professor of Marketing; Bernice and Leonard Lavin Professorship

Thomas N. Hubbard

Elinor and H. Wendell Hobbs Professor of Management and Faculty Director of Strategic Initiatives

Maryam Kouchaki

Associate Professor of Management & Organizations

Martin Lariviere

Professor of Operations, Division Chair of Operations

Derek D. Rucker

Sandy & Morton Goldman Professor of Entrepreneurial Studies in Marketing, Professor of Marketing, Co-chair of Faculty Research

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