Effect of temporal Distance on Price and Destination Choice

Group 7: ED16B048, CH16B009, EE16B131, ME16B004, CS17B040

Construal Level theory:

Relationship between psychological distance and the extent to which people's thinking is
abstract or concrete. It states that the more distant the object is from individual the more
abstract it will be thought of, while the closer the object is, the more concretely it will be
thought of. Low level construal is when people think more concretely, it considers feasibility.
Whereas High level construct is when people think abstractly, it considers desirability.

Objective of study:
The purpose of this study is to test the effect of temporal distance on the spatial distance and
willingness to expend on travel cost.
Independent variable: Temporal distance
Dependent variables: Spatial distance and willingness to spend.

Hypotheses:
Less the temporal distance is, less will be the spatial distance and willingness to spend on
travel cost and vice versa.

Experiment Design:
General Process:
In this study, two groups of people will be formed randomly. The subjects will be chosen at
random from a sample set. The participants will be asked to imagine that they were planning
a vacation a certain amount of time in the future.
The first group will act like a control group, where we will not mention any specific time and
just ask them to choose from the same options. This will help us set a baseline to compare
the results.
For the second group (experimental group), we will manipulate temporal distance by
changing the timing of the vacation in the questionnaire. Specifically, participants in the near
[middle/far] future condition will be asked to imagine that their vacation would be in the next
week [in 2 months / in 6 months]. Then, participants will be further asked to finalize one hotel
from the corresponding destination from the given set of hotels.

The details for the sample and questions asked in the survey are as follows:
Sample taken for Survey:
Care should be taken that the sample taken for the survey has the following two factors held
constant:
1. Income Level
2. Age group
Both factors can vastly affect the decision made in the questionnaire. Hence, we would
suggest taking this survey from young employees (23-35 years old) of a similar pay scale of a
big company. This would ensure that the above two factors remain constant.
Destination:
Three destinations are chosen keeping a sample from Chennai in mind.
1. Pondicherry (Close-by)
2. Kochi (Moderate distance)
3. Manali (Comparatively far)

Price:
Each destination has hotels in three price ranges,
1. Low end (Rs. 1000-1500)
2. Moderate (Rs. 3000-Rs.4500)
3. High end hotels (Rs. 6000+)
Care was taken that appropriate facilities were provided for the cost and for a price range
they were more or less the same for all destinations.

Duration:
Another question that can be asked is how many days would the participant like to take the
vacation for? (options from 2 days - 8 days)

Hotels:
Place Name Services Price per night
Pondicherry Eden Park • Air conditioned Rs. 1300/-
• Wi-Fi
• 24 hr. room service

Pondicherry Annamalai International • Air conditioned Rs. 3000/-

• Wi-Fi
• 24 hr. room service
and housekeeping
• Restaurant & Bar
• Gym

Pondicherry The Promenade • Sea facing Rs. 6200/-

• Air conditioned
• Wi-Fi
• 24 hr. room service
and housekeeping
• Restaurant, Bar and
Cafe
• Gym
• Spa
Place Name Services Price per night
Kochi Park Connect • Air conditioned Rs. 1379
• Wi-Fi
• 24 hr. room service

Kochi Radisson Blue • Air conditioned Rs. 3300

• Wi-Fi
• 24 hr. room service
• Restaurant & Bar
• Gym

Kochi Sea Lagoon • Sea facing Rs. 6200

• Air conditioned
• Work Desk and
couch
• Wi-Fi
• 24 hr. room service
and housekeeping
• Restaurant, Bar and
Cafe
• Gym
• Spa
• Swimming Pool

Manali Sun Park • Air conditioned Rs. 1400

• 24 hr. room service
 Place Name Services Price per night
Manali Orchard Villa • Experience of Rs 3900
cottage stay
• Air conditioned
• Wi-Fi
• 24 hr. room service
• Restaurant & Bar
• Gym

Manali Snow Flakes • Air conditioned Rs. 6000

• Wi-Fi
• 24 hr. room service
• Restaurant & Bar
• Gym
• Spa and Massage

Precautions and Possible Pitfalls:

Compromise Theory:
The compromise effect is a heuristic by which middle-priced options are selected rather than
the extreme options. This effect is “common and robust, representing the rule rather than the
exception in choice behavior”. One explanation of the compromise theory is extremeness
aversion, If a middle-price option is available, then it will have relatively small advantages and
disadvantages relative to each extreme. Other explanation is to reduce the complexity of
decision making. As cognitive complexity increases, impromptu decisions are more likely to
use heuristics because they simplify the process.

Personal Bias: Some participants might have specific choices in terms of vacation
destinations (for e.g.: Sea v/s mountains) or he/she may have already been to a place biasing
his/her answer.