Enhancing the profitability of airline tickets through contextual effects

Author

David Gonzalez Prieto

Supervisors

Pep Simo, Jose M Sallan

Defense date

26 July, 2017

Abstract

Strongly and firmly, product customization and a la carte features have evolved, aided by the extensive development of e-Commerce, up to becoming an essential trait in most of online purchasing processes across almost every industry. Nowadays, huge possibilities of customization are offered to the customer in order to meet the different needs of each individual through multiple extras, no matter when, where or what they are buying. Several combinations of these multiple attributes that could be chosen or added to a base product constitute the main structure of those purchasing processes, which aim to provide the appropriate product for any individual.

In this scenario, contextual effects affecting customer's behavior within these small worlds of choices become deeply relevant. Every year, the number of purchasing decisions occurring in front of a device screen increases, highlighting the importance of understanding which processes underlie below those limited sets of information and how do they influence our perceptions.

This thesis aims to contribute to the existing research on contextual effects affecting purchasing decisions focussing on decoy options. The aim of this research is to develop a better understanding on decoy options and, in particular, being able to integrate this knowledge under a real and practical approach, understanding decoy options and decoy effect as non isolated elements which are affected by other contextual effects and exposed to interactions.

In Chapter 1 of the thesis, an overview on the different contextual effects which are likely to affect the performance of decoy effects is presented. After introducing decoy effect and for every scenario, formulation of the interaction hypothesis is developed, always considering the air transport industry as a reference for practical examples. A total of nine interactions are evaluated and discussed out of nine different effects. This selection is limited to those more prone to appear in real purchasing processes as will be further discussed in the same Chapter 1.

Two different studies are developed, each one aiming to answer one specific question. In the first study, presented in Chapter 2 the experiment proposition gives an answer on how multiple decoy options within the same choice set affect decoy effect performance. Moreover, the experiment is discussed under different approaches, presenting the main theories about the cognitive processes that lead to a change in individuals' perceptions through decoy effects and testing them in this new scenario. Different types of decoy are tested and the effect of the inclusion of a no-choice option is also discussed. One of the outcomes of this study identifies which are the decoy type pairs that positively interact with each other so that the overall effect is to be enhanced. In the second study, presented in Chapter 3, the effect of fatigue understood as cognitive effort, is evaluated considering how it affects decoy effect performance. In the experiment, multiple combinations of individuals with different levels of cognitive effort are asked to complete a task that contains several choice sets containing a decoy option. This study leads to understand how decoy options' performance is affected by the previous context of the individual and gives significant insight for designing purchasing processes with multiple and complex stages. Finally, Chapter 4 presents the summary and discussion for the conclusions obtained for the previous findings.

Contents