Constructing stable preferences effects of dimensions of experience on movie preference in vietnamese facebook community

INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM 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 ' f I By MAl QUANG HUY Academic Supervisor: DR NGUYEN VAN PHUONG HO CHI MINH CITY, JULY 2012 " , t Contents List of Tables ii List of Figures ii Abstract iii CHAPTER INTRODUCTION 1.1 Problem Statement 1.2 Research Objectives 1.3 Research Question 1.4 Scope ofthe Study 1.5 Significance of the Study 1.6 Structure of thesis Chapter summary CHAPTER LITERATURE REVIEW 2.1 Previous studies 2.2 Analytical framework 2.2.1 Preference 2.2.2 Experience 10 2.2.3 Condition ofExperience 11 2.3 Chapter summary 12 CHAPTER RESEARCH METHODOLOGY AND DATA 14 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 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 Chapter summary 35 CHAPTER CONCLUSIONS AND IMPLICATIONS 36 Reference 40 Appendix 42 List of Tables Table 1: Descriptive statistic of dependent variables and five main explanatory variables 25 Table 2: Correlation between dependent variables and 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 - Effects of existing preference and experience on constructing preference Figure - Analytical framework Figure - Asking flow of questionnaires .44 Figure - 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 Thien M~nh Anh Hung 62 Figure 7- Analysis of Thien M~nh Anh Hung 62 l' ii 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 iii CHAPTER 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 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; Hoeftler & 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 (Hoeftler & Ariely, 1999) However, this perspective does not mean that previous experiences 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", Hoeftler & 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 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 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/maiguanghuy?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 3rd 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 Chapter summary This chapter presents evolution of economics theories about preference from existing preference to constructive preference, and the concept of "Constructing Stable Preferences" in cinematography domain, especially in context of Vietnamese Facebook community In this chapter, research objective is stated as to demonstrate the relationship between preference and experience, to support the concept of "Constructing Stable Preferences", and research question is how five dimensions of experience affect preference for movie The scope of this study is Vietnamese Facebook community in cinematography domain CHAPTER2 LITERATURE REVIEW 2.1 Previous studies Although there is not any unique theoretical model that explains relationship between experience and preference, there are still some consistent researches so that this study could base on Steve Hoeffler & Dan Ariely (1999) concluded that the condition of experience is related to the type of preference constructed by consumers and the consistency they follow preference They also concluded that the hard and easy conditions disassociate objective and subjective preference Easy conditions of choosing facilitate consumers gain subjective preference, while difficult conditions facilitate objective preference About the consistency, they concluded that, when consumers make a single choice or repeated choices, consistency on the different attributes increased Jonathan E Alevy, Craig E Landry & John A List (2006) viewed the stability of preferences as a key argument to understand fundamental concepts of microeconomic theory, which are often used in public policy analysis They investigated further on anchoring a presumed modalities for preferences to f be constructed - in a field environment, and found mixed evidence of the importance of anchoring (with treatment effects), suggesting that market participants are not affected by irrelevant cues However, the behavior of new market participants is still such an interesting topic to study, and the diversity of anchors in the market environment implies further research in this area to discover basic insights of consumer preferences' nature Combine results of the two studies, we can understand that inner preference of consumer is constructed by experience in outer condition Later experience interacts with previous constructed preference to form new level of preference, in a process of evolution In this process, existing preference prevent irrelevant experience to affect constructing preference Tzahi Neuman, Einat Neuman, Shoshana Neuman (2010) used DCEs (Discrete Choice Experiments) to estimate preference structures for attributes of maternity-ward services among three groups of women: women expecting their first child that can be considered as group "no experience"; women who had experienced their first delivery that can be considered as group "one experience episode"; and women who had more than one delivery that can be considered as group "more than one experience event" Their purpose is to detect the effect of experience on preference patterns Their main conclusions are experience appears to changes the preference pattern; the amount (intensity) of experience seems to be irrelevant, not have an additional accumulated effect; socio-economic background variables seem to matter, that less-educated women with a lower household income seem to be more affected by experience This result implies that intensity of experience may disassociate from preference scale if preference anchoring is already diversified clear enough or there is no mechanism for intensity of experience to diversify preference anchoring Nevertheless, Steve Hoeffler & Dan Ariely ( 1999) imply that intensity of experience may increase preference scale if it can diversify preference anchoring Leonard Lee, Shane Frederick, and Dan Ariely (2006) focused on two shaping of preferences: knowledge (top down) and experience (bottom up) From three experiments, results show that the presence of a conceptually offensive ingredient in beer when received before consumption influences preferences more than when received after consumption The regular beer with a few drops of balsamic vinegar (MIT brew) was liked much less when disclosure preceded sampling than succeeded Disclosure of the secret ingredient after Appendix 13 Vietnam movie removed from Oscar 2012 nominee list http://www.tuoitrenews.vn/cmlink/tuoitrenews/lifestyle/vietnam-movie-removedfrom-oscar-20 12-nominee-list-1 5913 20 2012,4:55 PM (GMT +0700) A scene in the movie "Khat vong Thang Long" Vietnamese movie "Khat Vong Thang Long" (Thang Long Aspiration) has been removed from the nominee list for the Best Foreign film category of Oscar 2012 The only one Asian movie in the list is "Warriors of the Rainbow: Seediq Bale" of Taiwan According to VietnamNet, it is a surprise when the list does not include China's "Flowers of War", by director Zhang Yimou, "Le Havre", a Finland's film which won the FIPRESCI award at the Cannes Film Festival or "Where Do We Go Now?" of Lebanon, which took the Audience's Choice Award at the Toronto Film Festival Other notable movies which are not in the list include: "The Turin Horse" of Hungary, "Once Upon a Time in Anatolia" of Turkey, "Miss Bala" of Mexico and "Declaration ofWar" ofFrance Movies in this list include Denmark's "SuperClasico", Canada's "Monsieur Lazhar", Iran's "A Separation'', Poland's "In Darkness", Germany's "Pina", Morocco's Omar Killed Me" and Belgium's "Bullhead" "Thang Long Aspiration" tells about the chaotic period of Vietnam's feudal Le and Ly Dynasty in 9th century It won a silver prize for Best Film and two golden prizes for Best Director and Best Supporting Actor at Vietnam's Golden Kite Award last year The 84th annual Academy awards will take place at the Kodak theatre in Los Angeles on February 26,2012 63 - - - - - Appendix 14 Tet movies yet to hit new box-office record http://www.tuoitrenews.vn/cmlink/tuoitrenews/lifestyle/tet-movies-yet-to-hit-newbox-office-record-1.59562 29 2012,5:00 PM (GMT +0700) None of the Vietnamese (and foreign movies) that are being screened nationwide for the Lunar New Year season has hit a new record in ticket sales BHD Star Cinema opens earlier and longer than usual during Tet, offering screenings from 7.45 am to am on the following day The number of screenings also increases to sessions a day for Vietnamese movies Thanks to its Tet promotions, theaters, each of which has 666 seats, were packed with movie-goers Out of the Vietnamese movies, Hello Co Ba (Hello Ms Ba), Thien Menh Anh Hung (Blood Letter), Le Phi Tinh Yeu (Love Fee) and Loi Nguyen Huyet Ngai (The Curse of Blood Wormwood), Hello Co Ba attracted the greatest number of audiences At Megastar and Galaxy theatres, however, Thien Menh Anh Hung was the biggest hit Dinh Thanh Huong, director of Galaxy Studio, said Loi Nguyen Huyet Ngai was screened one week earlier than other movies and had garnered a revenue of VND 14 billion (US$672,000) Hello Co Ba and Thien Menh Anh Hung have reaped VND 11 billion and VND 10 64 l>,jlljg11 re$pectiv~ly after being in th~atres for a week :::>·:',,,, ' 0} ~tjlJ,~n9ne:J)fthese films"h;:tS)een.able to break the sales record of last year's Co Dau i)ai.¢nl~n (BridexW~): VND37.billion (US$1.7 million) ;; :