Hot-state decision making: Understanding Consumer Emotion and Rationality

By Aaron Reid
December 7, 2010
When consumers encounter promotions while shopping, they are compelled to act on their visceral impulses. At Sentient Decision Science, we call this compulsion hot-state decision making. Hot-states lead to a reduction in immediate self-control (Loewenstein, 2000), and many marketing campaigns emphasize immediate action with hot phrases like “One day only!” and “Call now!
Catchy slogans, such as “Hungry? Grab a Snickers’®,” Nike®’s “Just Do It,” and Sprite®’s “Obey Your Thirst,” tap into these visceral states and motivate immediate consumer behavior. As a result, consumers often fail to return to a cold-state, where the rational mind might be able carry greater weight on the decision.
From a marketing perspective, encouraging hot-state decision making has the potential to boost short-term sales since consumers will buy products during hot-states through simple reminders of their visceral depletions (e.g. “I am really thirsty!” or “I forgot how hungry I was!”). However, this may not always be the best strategy for long-term growth since consumers will often regret their decision later. Research continues to show that people are unable to fully comprehend why they acted so impulsively in past hot-states (Loewenstein, 1996), and decision regret can in turn lead to reduced customer loyalty and satisfaction.
This is the key question for marketers and product managers. How do we capitalize on real consumer visceral response in the short-term while simultaneously building long-term consumer satisfaction? Understanding how hot-state consumer decision-making works is critical to maximize pleasure and minimize pain in your customer base. This paper enumerates the why’s behind consumer hot-state decision making, and in doing so, better arms managers with insight that will lead to more effective short-term marketing without sacrificing the long-term customer relationship.
Hot-states are a universal phenomenon. They are formally defined as visceral states that markedly deviate from an equilibrium point, such as satiation (Loewenstein, 1996). These moments of heightened emotion are propelled by physical need-based drives, such as hunger, pain, and sexual arousal, and have a profound effect on behavior (Loewenstein, 1996). Hot-states often have a negative connotation because they motivate people to behave in impulsive ways. As a result, most traditional economists have not studied them seriously (Elster, 1998).
However, once we understand and are able to quantify emotion’s impact on decision making, we can model consumer hot-states in ways even traditional economists can appreciate that the function of visceral factors is rooted in evolutionary adaptations which act as survival mechanisms to regulate behavior and focus motivation on what is immediately essential to sustain life (Loewenstein, 1996). When in a hot-state, an individual narrows his focus on the immediate goal of alleviating or relieving the visceral deprivation. For example, when someone is in pain, visceral factors drive him to alleviate or reduce the pain, which becomes his most salient goal. As a result, visceral factors cause individuals to neglect other long-term goals in favor of alleviating the negative visceral state (Loewenstein, 1996).
The heightened arousal resulting from hot-states also causes a devaluation of other short-term alternatives by increasing the value of the option most strongly related to the source of arousal (Brendl, Markman, & Messner, 2003). An interesting illustration of this comes from a study in which some participants initially tasted a small amount of popcorn, which served to heighten their emotions and value for food, while others did not taste any popcorn (Brendl et al, 2003). All of the participants then rated the attractiveness of various consumer products including some food and non-food items. The people who had tasted the popcorn rated non-food products lower than those who had yet to taste the popcorn (Brendl et al, 2003).
This occurred because the popcorn tasters were in a hot-state and thus valued only products that would alleviate their hunger at the expense of devaluing unrelated products. Hot-states essentially shift the momentary weight of specific goals and thereby significantly influence short-term decision making.
Let’s return to our Oreo® example. Assume your long-term goals are maintaining a healthy weight and eating nutritiously. However, when you walk into the grocery store your visceral state of hunger is not at an equilibrium point because you haven’t eaten in eight hours. When you see the Oreos®, the driving force of your hunger leads you to seemingly act irrationally by behaving in contradiction to your long-term goals. You are in a hot-state, so you buy and eat the Oreos®.
All that has happened is that your emotions, which dictate your preferences, have shifted and intensified on a particular object. In the moment, you have a greater emotional reaction that motivates you to alleviate your hunger and give into your gut, quite literally, rather than abide by your long-term values of health and nutrition. Your values have not necessarily changed. Instead, the quantity and intensity of the emotion that is elicited by the different stimuli has increased, thereby making some values more prominent than others in the short-term context.
Since hot-states often result in people acting impulsively to get their drive states back to equilibrium, they seem to cause a disconnection between long-term self-interest and behavior; something that is preposterous to the traditional economist (Loewenstein, 1996). This is where irrationality enters the picture. Irrational is often defined as “not endowed with reason,” so by definition, if someone makes a decision based on emotion alone, he is labeled as irrational. We can better understand perceived irrationality when we know why people make impulsive decisions that may be self-destructive in the long-term.
It’s natural to have an emotional reaction to stimuli. In fact, emotion is our most fundamental cue to what we value. This draws into question whether emotion should be stigmatized as irrational. Hot-states seem irrational on the surface, and while they are much more complex, they are also predictable. Though hot-states lead people to value their short-term, immediate goals over long-term goals, they do not necessarily cause people to violate their self-interest. Instead, values simply shift and immediate goals become more salient in the individual’s self-interest. Are hot-states irrational if they are survival instincts that help focus our behavior on what is most important in our immediate environment? And if not, should we redefine irrationality?
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Aaron Reid

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Ph.D. Founder & CEO, Sentient Decision Science


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