Abstract

Based on Loss Aversion theory, this article analyzes and examines the effect of option framing (additive vs. subtractive) on consumers' decision-making efficiency (customization results and customization time) and the boundary conditions for the option framing effects: service importance, service type and individual expectation. Our experiment under the context of online information service customization produces the following findings: (1) Compared with the additive option framing, consumers in the subtractive option framing tend to choose more service options with a higher total option price; (2) Online option framing and service importance (important vs. less important) impose a significant interaction effect—the less important options will be more selected in the subtractive option framing and the important ones are more likely to be chosen in the additive option framing; (3) consumers' expectation plays a regulatory role in the relationship between option framing and  decision  time: consumers with low expectation tend to take more time when they use subtractive versus additive option framing; while those with high expectation prone to taking more time in the additive versus subtractive option framing. In addition, the interaction effect of online option framing and service type is not significant, but it presents the expected direction. These findings, in turn, offer interesting public policy and future research implications.

Key words: Online service customization, option framing effects, consumers' decision-making efficiency, boundary condition, service importance, individual expectation.