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Anyone who has followed consumer electronics and online services knows that once a product reaches dominance, it becomes very hard for it to be dethroned (hello, iPod, Google, and Windows). Economists have argued for years regarding the costs involved in finding and adopting alternatives, but the psychologists will point out that familiarity and comfort play major roles in keeping consumers loyal to an incumbent. Research that appears in the Journal of Consumer Research delves into how these factors, collectively termed "Cognitive Lock-in," develop and play out.

The authors of the study point out that previous research has shown that cognitive lock-in is not just an abstract concern, but one comes with real-world costs: "the costs associated with thinking about and using a particular product decrease as a function of the amount of experience a consumer has with it. Thus, repeated consumption or use of an incumbent product results in a (cognitive) switching cost that increases the probability that a consumer will continue to choose the incumbent over competing alternatives." This suggests that, even if a product isn't especially easy to use, familiarity with it may overcome that drawback as, ultimately, its users don't have to think about their actions in order to get things done anymore.

The authors note that this is borne out by real-world data, as Internet usage statistics show that visit times at commercial web sites decline over time. That decline, in turn, leads to positive results: those which show the biggest decreases in visit times rack up the most sales. The paper contends, however, that these sorts of effects are actually separate from any affection or trust, or even objective measures of product superiority. The authors suggest that a user's ability to detect a product's actual ease-of-use is quite limited, and familiarity is ultimately in control of cognitive lock-in.

To test this, they designed two alternate interfaces for a news web site: one navigated primarily by pull-down menus, the other by radio buttons. Test users did not indicate that the two differed in terms of ease of use, function, or enjoyment. They then set subjects loose with the goal of searching for information on the site in situations where there was always a single correct path to navigate to the needed material. After a variable number of exposures (typically anywhere from one to nine), the subjects were presented with the alternate interface and asked to choose.

As the authors expected, the number of trials had a positive, linear effect on the subject's preference for the interface they were using. This effect was so strong that, afterwards, 81 percent of the subjects claimed that the interface they were assigned was the one they would have chosen, and very few of them believed that their choice had anything to do with their familiarity.

The one thing that could block familiarity from ruling the choice of interface was an error, a misnavigation that resulted in a dead-end. As the authors put it, "the negative effect of having made errors using a product on preference for that product is persistent and essentially irrecoverable, even with a significant amount of additional experience." This was the only item that appears to factor into a user's perception of ease-of-use, as the actual steps each search wound up taking had no correlation to how easy users perceived things were.

To explore ease-of-use a bit further, the authors artificially manipulated the length of the search path. After a single exposure, this actual ease-of-use effect made a large difference: the "easy interface" was chosen by about 75 percent of those who used it, while less than half of the subject who got the hard one liked it. But familiarity gradually erased this difference. By nine trials, the "hard interface" had become the choice of 65 percent of those who had been stuck with it.

The authors argue that their results indicate that consumers learn interfaces—web-based and electronic—simply by a trial-and-error process. As long as errors aren't that common, the trial portion of things will bring them a familiarity that ultimately produces the cognitive lock-in. If there's a weakness to the study, it's that they don't register the number of errors; instead, they analyze errors as being present or absent. Given the sample sizes, it's doubtful that differences in the error number would register as significant, but a follow-up study that related choice to frequency of mistakes would be informative.

The study also suggests that some efforts that attempt to leverage interface familiarity in new markets (a common practice in the tech world) may be misguided. In their final experiment, the researchers swapped tasks on the subjects, asking them to instead navigate to and post in a discussion of a news article. In that case, familiarity with the news site's search interface didn't translate to a preference for using that interface for the discussion thread.

Overall, the results suggest that all the years of arguments over the relative merits of things like the Mac and Windows user interfaces were a waste of time: we're generally convinced that whatever we're familiar with is the best. That said, future choices go on against a backdrop of economic considerations and heavy marketing. Given the prominent role these researchers assign error, maybe Apple is on the right track when they try to remind people of every annoyance they might have experienced on a PC...
 
 
14 April 2007 @ 05:48 am
The exact relationship is as follows: Let us suppose that the spot price of wheat is ?100 per 100 quarters, that the price of the 'future' contract for wheat for delivery a year hence is ?107 per 100 quarters, and that the money-rate of interest is 5 per cent; what is the wheat-rate of interest? ?100 spot will buy ?105 for forward delivery, and ?105 for forward delivery will buy 105/107 ? 100 ( = 98) quarters for forward delivery. Alternatively ?100 spot will buy 100 quarters of wheat for spot delivery. Thus 100 quarters of wheat for spot delivery will buy 98 quarters for forward delivery. It follows that the wheat-rate of interest is minus 2 per cent per annum. It follows from this that there is no reason why their rates of interest should be the same for different commodities,—why the wheat-rate of interest should be equal to the copper-rate of interest. For the relation between the 'spot' and 'future' contracts, as quoted in the market, is notoriously different for different commodities. This, we shall find, will lead us to the clue we are seeking. For it may be that it is the greatest of the own-rates of interest (as we may call them) which rules the roost (because it is the greatest of these rates that the marginal efficiency of a capital-asset must attain if it is to be newly produced); and that there are reasons why it is the money-rate of interest which is often the greatest (because, as we shall find, certain forces, which operate to reduce the own-rates of interest of other assets, do not operate in the case of money). It may be added that, just as there are differing commodity-rates of interest at any time, so also exchange dealers are familiar with the fact that the rate of interest is not even the same in terms of two different moneys, e.
 
 
 
 

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