Luận văn thạc sĩ UEH constructing stable preferences, effects of dimensions of experience on movie

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

HO CHI MINH CITY THE HAGUE

VIETNAM THE NETHERLANDS

VIETNAM - NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

CONSTRUCTING STABLE PREFERENCES:

EFFECTS OF DIMENSIONS OF EXPERIENCE

ON MOVIE PREFERENCE

IN VIETNAMESE FACEBOOK COMMUNITY

BY

MAI QUANG HUY

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, JULY 2012

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UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES

HO CHI MINH CITY THE HAGUE

VIETNAM THE NETHERLANDS

VIETNAM - NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

CONSTRUCTING STABLE PREFERENCES:

EFFECTS OF DIMENSIONS OF EXPERIENCE

ON MOVIE PREFERENCE

IN VIETNAMESE FACEBOOK COMMUNITY

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

MAI QUANG HUY

Academic Supervisor:

DR. NGUYEN VAN PHUONG

HO CHI MINH CITY, JULY 2012

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Contents

List of Tables..................................................................................................................ii

List of Figures.................................................................................................................ii

Abstract..........................................................................................................................iii

CHAPTER 1. INTRODUCTION...............................................................................1

1.1 Problem Statement ............................................................................................1

1.2 Research Objectives..........................................................................................2

1.3 Research Question.............................................................................................3

1.4 Scope of the Study ............................................................................................3

1.5 Significance of the Study ..................................................................................3

1.6 Structure of thesis..............................................................................................3

1.7 Chapter summary ..............................................................................................3

CHAPTER 2. LITERATURE REVIEW....................................................................5

2.1 Previous studies.................................................................................................5

2.2 Analytical framework .......................................................................................7

2.2.1 Preference...................................................................................................9

2.2.2 Experience................................................................................................10

2.2.3 Condition of Experience ..........................................................................11

2.3 Chapter summary ............................................................................................12

CHAPTER 3. RESEARCH METHODOLOGY AND DATA ................................14

3.1 Empirical Models............................................................................................14

3.2 Constructing variables ....................................................................................14

3.3 Database ..........................................................................................................21

3.3.1 Subjects of preference and experience.....................................................21

3.3.2 Objects of preference and experience ......................................................23

3.4 Chapter summary ............................................................................................24

CHAPTER 4. RESULTS AND DISCUSSION .......................................................25

4.1 Data Description .............................................................................................25

4.2 Econometric results.........................................................................................26

4.2.1 Unrestricted models .................................................................................26

4.2.2 Restricted models.....................................................................................29

4.3 Result explanation...........................................................................................32

4.4 Study limitations.............................................................................................34

4.5 Chapter summary ............................................................................................35

CHAPTER 5. CONCLUSIONS AND IMPLICATIONS ........................................36

Reference ......................................................................................................................40

Appendix ......................................................................................................................42

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List of Tables

Table 1: Descriptive statistic of dependent variables and five main explanatory

variables........................................................................................................................25

Table 2: Correlation between 2 dependent variables and 5 main explanatory variables

......................................................................................................................................26

Table 3: Results from four unrestricted models...........................................................27

Table 4: Results from four restricted models...............................................................29

Table 5: Objects of preference and experience ............................................................45

Table 6: Effects of dimensions of experience on Subjective Preference .....................49

Table 7: Effect of Recognizing Experience on Subjective Preference ........................50

Table 8: Effects of dimensions of experience on Objective Preference.......................51

Table 9: Effects of Tasting and Choice Experiences on Objective Preference............52

Table 10: Effects of dimensions of experience and individual movies on Subjective

Preference .....................................................................................................................54

Table 11: Effects of Recognizing Experience and significant movie on Subjective

Preference .....................................................................................................................56

Table 12: Effects of dimensions of experience and individual movies on Objective

Preference .....................................................................................................................57

Table 13: Effects of Tasting and Choice Experiences and significant movies on

Objective Preference.....................................................................................................59

List of Figures

Figure 1 - Effects of existing preference and experience on constructing preference ...7

Figure 2 - Analytical framework ....................................................................................8

Figure 3 - Asking flow of questionnaires.....................................................................44

Figure 4 - Share of voice for selected Vietnamese movies from Oct 2011 to Mar 2012

......................................................................................................................................60

Figure 5 - Vietnam's movies - Sentiment scoring ........................................................61

Figure 6 - Weekly buzz of Thiên Mệnh Anh Hùng .....................................................62

Figure 7 - Analysis of Thiên Mệnh Anh Hùng.............................................................62

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Abstract

In market economy, neoclassical economists tell a story of demand side that every

consumer compare utility of each unit of every commodity, to decide to consume the

unit that provide higher utility. In that story, utility is understood as obvious

usefulness that any unit of commodity could provide, and preference is just the result

of "utility maximization" process.

Nevertheless, real world tells another story. A unit of any commodity may be useful,

useless, or even harmful for a consumer, depending on specific condition at the time

of consuming the unit. Preference may not only be the result of "utility maximization"

but also "harm minimization" process. Furthermore, complicated adaptation process

could also significantly affects preference of consumer.

This study investigates the relationship between preference and conditions of

experience of Vietnamese movie theater audiences of Facebook community over

popular fourteen movies in the time from 3rd to 29th of December 2011. In this study,

data was collected by questionnaires over 67 identified Facebook users, and there

were 191 raw observations (162 pure observations after validating). The results from

logistic regression models indicate that subjective preference associates with

recognizing experience (information condition), and objective preference associates

with tasting experience (trial condition) and choice experience (easy-choice

condition). The results also suggest that objective preference is more stable than

subjective preference. This study also have evidence of higher level of preference for

some movies excluding effects of experience, imply existing preference or

unconsidered dimensions of experience that future works should notice. Therefore,

this study is consistent with previous studies on “Constructing Stable Preference”, and

recommends further studies to develop demand-side theories. Movie theaters in Viet

Nam could also apply this study to affect their customer demand by offering many

forms of movie experience.

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CHAPTER 1. INTRODUCTION

1.1 Problem Statement

Although preference is a key factor of demand side in market economy,

relevant theories are not so clear. Neoclassical economists explained that

consumer compare utility of each unit of a commodity with each of others, to

decide to consume the unit that provides higher utility. In order to do that,

consumers must have existing preferences. However, these preferences don’t

seem to exist, but to be constructed, according to evidences from both

psychologists and economists (Bettman, Luce, & Payne, 1998; Hoeffler &

Ariely, 1999; Slovic, 1995).

Preference is constructed by the decision maker within the decision task and

its context. This is an emerging generalization in the behavioral decision

theory literature (Payne, Bettman, & Johnson, 1993). The constructive

preference perspective argues that people often construct their preferences in a

given situation based on information available at the time of preference

elicitation (Hoeffler & Ariely, 1999). However, this perspective does not mean

that previous experiences do not affect latter decisions of consumers, but

consumers decide their choice based on their relevant experiences, including

previous relevant decisions.

By introducing the concept of "Constructing Stable Preferences", Hoeffler &

Ariely (1999) examine some common dimensions of consumer experiences

(Effort, Choice and Experience), and effects of these dimensions on formation

of preference. Movie is a disposable commodity that defines a domain

appropriate for studying the impact of experiences like these on consumer

preferences. Traditionally, Cinema is the seventh art, which supply an

entertainment form for modern life and a center to exchange ideas. Different

from Architecture, Sculpture, Painting, and even Music, Poetry, Dance, works

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of Cinema are more convenient to reach public, because they are of high level

of spreading, they have economies of scale, they maximize viewers’ feeling,

and they express life questions as whole systems. As an art, each work of

cinema define a separate concept, which create different levels of audience’s

preferences, and concepts of different works of cinema also create different

levels of preference on the same audience. As a center of exchanging ideas,

cinema is the place where people go to acquire knowledge, emotion and

inspiration from the community as well as from over the world. Therefore, in

cinematography domain, we have many units (movies) to study relationship

between preferences for them and experiences about them.

In Vietnam recent years, unlike in the past, youths got used to watch movies in

cinemas, instead of at their homes. Therefore, we would choose

cinematography domain to investigate relationship between Vietnamese

youths’ preference for movies and their experience about these movies.

Vietnamese youths also tend to exchange their perspective, using social

networks like Facebook. By focusing on young respondents that is target

customers of cinemas, in this study, Facebook community was selected to

examine as its impact and popularity.

1.2 Research Objectives

With objects of movie, and subjects of Vietnamese Facebooker, this study aim

to:

 Find evidence of relationship between experience and preference.

 Recognize different types of experience in association with different types

of preference.

 Find evidence of preference stabilization process.

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1.3 Research Question

How can dimensions of experience (recognizing, tasting, choice, effort, and

consuming) affect preference for movie in Vietnamese Facebook community?

1.4 Scope of the Study

This study aim to clarify relationship between preference and experience in

Vietnamese Facebook community, so we ask our friends from our Facebook

account friend list (http://www.facebook.com/maiquanghuy?sk=friends) to be

respondents of this study.

Fourteen movies that are examined in this study were recently shown movies,

now showing movies, and coming soon movies in the time from 3

rd to 29th of

December 2011 (table 4, appendix 3).

1.5 Significance of the Study

This study supports the concept of “Constructing Stable Preferences”, and

further clarifies the demand side of market economy.

1.6 Structure of thesis

There are five chapters in this study. The first chapter introduces the problem

of demand side in market economy, and the study itself. The second chapter

clarifies the concepts of preference and experience, as well as orientates the

way this study approach the problem on the base of previous studies. The third

chapter explains the models being used, and the way these models have been

building up. The fourth chapter discusses the results of running regression.

The last chapter concludes the significance of this study.

1.7 Chapter summary

This chapter presents evolution of economics theories about preference, from

existing preference to constructive preference, and the concept of

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