Living on the Edge and In the Instant: Formalizing the Utility of Intense, High-Stake, Real-Time Experiential Consumption

Robert E. Krider

Simon Fraser University

 

Luc R. Wathieu

Harvard Business School

Extreme Leisure

• Millions of Frequent Participants (U.S.)

– Off-road mountain biking • 0.3 (1993) 2.6 (2002)

– Kayaking / Rafting• 0.5 (1993) 1.3 (2001)

– Snowboarding• 0.6 (1993) 1.6 (2001)

Extreme Leisure

• the US Adventure Travel Society estimatesadventure travel was worth

$245 million in the US in 2002

Extreme Leisure

• U.S. Hang Gliding Association Membership (hang gliding and

paragliding)

• 1980 165• 1990 234• 2000 767• 2002 1688

Extreme Leisure (voyeur department)

• EXTREME: “Denoting an activity in which participants actively seek out dangerous or even life-threatening experiences."

• X-Games—ESPN’s contribution• Skateboarding, surfing, BMX, motocross, MTB,

snowboarding, wakeboarding, rollerblading… • 2002 Summer X-Games VIII garnered 62.7

million viewers• 2003 Winter X-games sponsors: Jeep,

Mountain Dew, Motorola, Taco Bell

Literature• Brannigan, A. and A.A. McDougall (1983). Peril and

pleasure in the maintenance of high risk sport: A study of hang-gliding. Journal of Sport Behavior,

• Scitovsky, T. (1981). The Desire for Excitement in Modern Society.

• Nicholson, J. (1986) Risk Recreation: A Context for developing Client Potential, Journal of Counseling and Development

• Celsi, R. L., R. L. Rose and T. W. Leigh (1993). “An exploration of high-risk leisure consumption through skydiving” Journal of Consumer Research.

Celsi, Rose, & Leigh (1993)Sociocultural approach to skydiving:• ”flow” –total involvement, no mental room left for

anything else; produces euphoria; addictive• safety is paramount• control motive: matching context to abilities• achievement motive: desire to continually learn, to

increase skill level; • insiders and outsiders: impossible for insiders to

communicate emotions to outsiders; participants evaluate risks very differently from outsiders

• Insiders separate controllable and uncontrollable risks.

Objectives

• Develop formal model of voluntary risky consumption behaviour

• Explain and integrate • Use this unexplored /anomalous behaviour

for insights into – managing consumption experiences– Improving understanding of decision

making under uncertainty

Core model: peril control training• Most parsimonious way of making a choice to expose

oneself to a probability of great loss (death) optimal• By incorporating control and skill learning• Controllable perils are function of survival skill::

probability of death is lower for a more skilled participant

• Voluntary activities and involuntary events in the environment are defined by their mix of uncontrollable and controllable peril.

Core model: peril control training

• Two periods:• First period (training peril)–choose activity with uncontrollable

and controllable risk: ie, choose { pu1 , pc1 } [0,1]∈ 2 , where the

Probability of death in period 1 is

P1 = pu1 + pc1

• Second period (environmental peril)-- nature chooses

controllable and uncontrollable peril pu2 , pc2 . Learning:

choosing a larger pc1 in first period improves survival skill, which

decreases uncontrollable risk in second period:

P2 = pu2 + pc2(1 -α pc1)

• Survival Probability

S = (1 – P1)(1 – P2)• Decision objective

• Solution: -uncontrollable peril avoidance:

pu1* = 0

-controllable peril seeking

pc1 * = ½ – (1 – p2u – p2c ) /(2αp2c)

• pc1* is greater with larger α, pc2 and pu2

21 1, 0,1u cp pMax S

Limitations

• Well defined two stage sequence—endogenous training, followed by exogenous peril

• Foresight of exogenous peril probabilities• Linear learning and impact of learning on

survival.• Why doesn’t everyone hang glide?

Survey

• Web survey of members of West Coast Soaring Club (paragliding and hang gliding), MBA students, and undergrads

• Exploratory hypotheses are that WCSC members dislike uncontrollable risks and like controllable risks.

• Questions on appeal of various “risky” activities with various levels of control

• Questions on lotteries to assess relative risk preferences.

Mean appeal to try once0 = very unappealing, 4 = very appealing

2

3

4

5

whitewater kayaking rafting client

WCSC

UG

MBA

Mean Appeal as regular activity0 - very unappealing, 4= very appealling

2

3

4

5

whitewater kayaking rafting client

WCSC

UG

MBA

Likelihood of buying a lottery ticket1= low, 5 = hi

2

3

4

5

a 1-in-one millionchance of w inningone million dollars?

a 1-in-10 chance ofw inning ten dollars?

a 1-in-2 chance ofw inning tw o dollars?

WCSC

UG

MBA

Likelihood of taking a bet1= low, 5 = hi

1

2

3

4

a 50% chanceof losing $100

and a 50%chance of

gaining $100

a 50% chanceof losing $100

and a 50%chance of

gaining $200

a 10% chanceof losing $10

and 90%chance ofgaining $2

a 1 in 1000chance of

losing $1000and 999 in 1000

chance ofgaining $20

WCSC

UG

MBA

Reasons for flying

0

5

10

15

20

25

30

35

40

not at all a bit but Ican livewithout it

it matters it mattersa lot

a wayhuge

reason

N

Socializing with like-minded people

Thrill of exposure tophysical harm

Satisfaction in exercisingcontrol and skill inchallenging situations tokeep yourself safe

Letting the worldespecially non-fliers knowthat you participate in thissport

The physical sensations offlying

Satisfaction of continuallyIncreasing yourcompetence and skill

Reasons for flying (Open-ended )

• Opportunities for learning about nature: weather, birds, micrometeorology, etc.

• the never ending learning process • living on the edge • --------------------------------------------• fulfillment • Absolute escape from other pressures and demands of life -

when I'm flying there is no time to think of anything else and no way out till the flight is done.

• absence of every thing else when flying • Experiencing the air as a different medium (gliding vs. still), 3D

aspect of flying (i.e. 3 degrees of freedom vs.sailing - 2D or driving -1D), scenery, transcending the nature (non-powered flight)

Work in progress

• Eliminate need for foresight of upcoming dangerous event

• Why doesn’t everyone hang glide?

Summary

• Voluntary exposure to peril observed• Focus on control and learning• Core model of peril control training where voluntary

exposure to a probability of death is rational• Exploratory survey supports model• Leading to a deeper understanding of experiential

consumption beyond extreme sports