Exploring drivers and implications of regret- vs utility-based decision-making in consumer wine choice

Abstract

Purpose Studies of wine choice in real or simulated retail environments typically assume that consumers are utility-maximizing individuals. However, choosing a bottle of wine from crowded shelves can be challenging and inherently risky. Describing consumers who use risk-reduction strategies as regret minimizers rather than utility maximizers is more in line with consumer psychology. Against this background, this study aims to introduce regret minimization as an alternative decision rule to explain wine purchase behavior. Design/methodology/approach This study evaluates the prevalence of decision-making rules – specifically, utility maximization and regret minimization – for regular wine buyers across different markets and consumer segments. Data from choice experiments conducted in a traditional wine market (Austria) and a non-traditional one (China) were analyzed using a hybrid random regret minimization-random utility maximization (RRM-RUM) model that links personal characteristics (wine knowledge, involvement and attitude toward price) with the probability of using regret- or utility-based decision rules. Findings The results indicate a high probability of regret-based decision-making among wine buyers in both countries, highlighting the need to account for diverse decision-making rules in future research. Notably, less knowledgeable and less involved wine buyers in both countries were more likely to use regret-based decision rules. These buyers relied on easily accessible cues and used risk reduction strategies by focusing on price-quality associations in Austria or reputation-signaling attributes in China. The managerial implications derived from the regret- and utility-based models differed considerably, highlighting the importance of considering both behavioral decision rules when tailoring wines and retail strategies. Originality/value To the best of the authors’ knowledge, this is the first application of a mixed random utility-random regret model to wine choice, and the first assessment of the generalizability of decision rules across countries.

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