Personality traits as drivers of social preferences: a mixed logit model application

We follow the definition provided by McCrae and Costa (1996) and McCrae and Costa (2008, p. 165) and view human personality as a description of individuals in terms of thoughts, feelings and behavior. Personality has a biological/genetic foundation, and therefore, “personality traits are endogenous basic tendencies that (could only) be altered by exogenous interventions, processes, or events that affect their biological bases” (e.g., a brain tumor) (McCrae and Costa 2008, p. 165). Several studies have empirically proven the validity of this definition and argue that personality is relatively stable throughout adulthood (e.g., Harris et al. 2016; McCrae and Costa 1982).

Following the popular five-factor theory, human personality is formed by the following five distinct personality traits: extraversion, neuroticism, openness to experience, agreeableness, and conscientiousness. Extravert personalities have social skills and are described by facets, such as warmth and assertiveness. Neurotic persons are anxious, tend to suffer from depression and have pessimistic attitudes. Open personalities are interested in travel and tend to prefer fantasy. Agreeable personalities believe in cooperation and exhibit altruistic behavior, while conscious personalities are dutiful and show leadership skills (cp. McCrae and Costa 2008, p. 164; McCrae and Costa 1996, p. 67).

This five-factor model has become the leading tool used to operationalize personality because several studies have proven the five factors of personality to be invariant to the considered culture and age (in adulthood), rendering this model powerful and robust (e.g., McCrae and Costa 2013; Specht et al. 2011; McCrae et al. 2005).

To determine the personality of an individual, several personality tests exist. These tests primarily rely on rating scales in which the respondents evaluate themselves with regard to different facets (e.g., Gosling et al. 2003; Costa and McCrae 1992; Goldberg 1992). Commonly, the results of different facets are pooled to achieve the results of the associated factor. For example, to assess a consumer’s extraversion level, the results of that consumer’s self-assessment of facets, including warmth, gregariousness and assertiveness, are aggregated.

In contrast to inborn (biological) personality traits, personal values are commonly described as the product of a person’s environment and reflect a person’s motivation (Parks-Leduc et al. 2015, p. 5). Personal values are personal temporal life goals that guide a person’s behavior (Parks-Leduc et al. 2015, p. 3). To assess personal values, several approaches exist. In the psychological literature, the circle value model proposed by Schwartz (1992), which includes different value types, such as tradition, power, and hedonism, is very popular. In the marketing literature, the Rokeach Value Survey (RVS) in which respondents are asked to rank several personal goals, such as freedom, family security, and self-respect (Asendorpf 2004, p. 240), and the List of Values concept proposed by Kahle (1983), which is based on the personal goals used in the RVS (Kahle et al. 1986, p. 206), are often used to operationalize personal values.

The concept of lifestyle was first introduced in the marketing literature by Lazer (1963). The term “lifestyle” describes how people spend their time, how they live, how they recognize other individuals and their main interests (Kucukemiroglu 1999). To assess the lifestyle of individuals, the AIO-approach proposed by Wells and Tigert (1977) is highly popular. In this approach, individuals evaluate several statements about their activities (A), interests (I) and opinions (O). However, the AIO-approach is frequently criticized due to the lack of replicability, which stems from less time-stable attitudes (e.g., Newton and Meyer 2013).

In contrast to personality traits, personal values and lifestyle are influenced by exogenous factors. For example, culture has a strong impact on personal values and lifestyle (Lee and Sparks 2007; Inglehart and Beker 2000). Therefore, studies considering the impacts of personal values on other concepts, such as consumer preference for social product attributes, are culture-dependent, and the generality of the results is limited. In contrast, the investigation of personality traits overcomes this problem and leads to an all-encompassing view of the psychological determinants of social consumption.

In the psychological literature, there has been a great debate regarding the similarities and differences between human personality and personal values. While some researchers view personality and personal values as completely interchangeable constructs, other scholars distinguish between these constructs (in varying degrees of overlap, i.e., completely different versus related to some extent). A meta-study conducted by Parks-Leduc et al. (2015) found that differences actually exist between personality and personal values, and therefore, the authors strongly contributed to a deeper understanding of the relevant research field. Although differences are present between these constructs, personality and personal values are related to some extent. In this context, some personality factors are more closely related to personal values than other factors. For example, Fischer and Boer (2015) found that the personality traits agreeableness and openness to experience have the strongest association with personal values. Rokeach (1973) argued that a person’s personality is an antecedent of the person’s personal value. Hence, the investigation of personality as a driver of consumers’ preference for a social product attribute implicitly also encompasses investigating the potential of personal values to act as drivers.

As previously mentioned, research linking consumer preferences for social product attributes to consumer personality is sparse. One additional exception is the study conducted by Grankvist and Kajonius (2015), who investigated the predictive potential of personality and personal values for consumers’ WTP (and, therefore, consumers’ preferences) for social product alternatives. However, the primary goal of this study was to identify differences in the psychological constructs of personality and personal values, and, therefore, this study focuses on the psychological context rather than the marketing context. Hence, the results are tailored to differences between these two psychological constructs rather than econometric or managerial implications for marketing managers regarding social product enhancements. In particular, Grankvist and Kajonius (2015) replicated the popular study conducted by Roccas et al. (2002), who investigated the predictive potential of personality and personal values for religiosity and positive affect. On the one hand, Roccas et al. (2002) determined that “values, as cognitive representations of motivations in the form of goals and objectives [have stronger influence on behaviors] over which individuals have cognitive control or choice” (p. 793). On the other hand, traits have a stronger influence on behavior with minimal cognitive control and are “better predictors of spontaneous, intuitive and emotionally driven attitudes and behaviors” (p. 793). In an FT context, Grankvist and Kajonius (2015) asked the respondents to directly state their WTP for FT alternatives and found that personal values and personality traits correlate with consumer WTP. Although these scholars determined that personal values account for more variance in consumer WTP than personality traits in their study, they referred to Rokeach (1973) and conceded that personal values are actually influenced by personality traits. In particular, two personality factors, e.g., openness and agreeableness, had a considerable overlap with personal values.

Although the general research questions regarding the psychological drivers of consumers’ preference for social products in our study and the study conducted by Grankvist and Kajonius (2015) seem similar, there are several differences.

In contrast to Grankvist and Kajonius (2015), we (1) investigate consumers’ preference for an FT label attribute by using a discrete choice experiment. As a social product attribute, the FT label is highly relevant in this context. Recent research has shown that (worldwide) the number of people who attach high importance to the FT label when making a purchase decision is high and still increases (Statist 2019). Furthermore, discrete choice experiments represent an indirect method to determine consumers’ preferences. The estimation results obtained using indirect measurement methods are known to suffer less from highly inflated estimates because the social-desirability-bias is less prevalent compared to that using the direct methods used by Grankvist and Kajonius (2015) and Roccas et al. (2002). (2) While Grankvist and Kajonius (2015) used the FT products roses, bananas, footballs and cups of coffee, we use the product category of denim jeans. Jeans constitute fashion products, and hence, choices between denim jeans are known to be more emotionally driven than choices between nondurable goods, such as food and flowers (cp. Watson and Yan 2013). Considering the results reported by Roccas et al. (2002), who found that personality traits predict behaviors even better if they are emotionally driven, we may expect personality traits to have a greater influence on denim jeans purchases in general than fast-moving consumer-goods purchases, such as bananas, etc. In addition, denim jeans are highly underrepresented in relevant studies as revealed by a meta-analysis conducted by Tully and Winer (2014) in which no single study among a list of more than 80 studies concerning sustainable consumption considers denim jeans. However, denim jeans represent a frequently purchased product and are widely spread across consumers of varying genders, ages, social classes, etc. in Germany. (3) Hence, our results could be used for interstudy comparison with Grankvist and Kajonius (2015), and we could examine the results reported by Roccas et al. (2002) based on the exploratory power of personality traits for consumers’ preference of social attributes of a more emotional product category (denim jeans versus coffee in the study by Grankvist and Kajonius (2015)). (4) While Grankvist and Kajonius (2015) and Roccas et al. (2002) used student samples, we use a representative German sample. Student samples are obviously biased by young and highly educated respondents and, therefore, lead to less generalizable results. The use of a representative sample may further contribute to generalizing the findings of previous studies if parallels become obvious. (5) We directly apply our results in a marketing context. The main purpose is to draw inferences for marketing managers in the field of social consumption. For example, we enable managers to make decisions regarding investment in social product enhancements and the advantageousness of consumer segmentation to increase companies’ profits. We are interested in the psychological characterization of social consumers rather than the pure distinction between consumers’ personality and personal values and the determination of potential personality drivers of social consumption. In contrast to time-varying personal values, time-stable personality traits are highly relevant for long-term marketing decisions.

In this context, we have to keep in mind that “long-term” marketing decisions do not coincide with marketing decisions that are fixed over decades/generations, but with strategic marketing decisions. Strategic marketing decisions last, on average, for three to five years (Aaker 2008). The characterization of consumers enables marketing managers to establish policy tools for different market segments that at best result in increasing customer satisfaction and revenue (Abou-Zeid and Ben-Akiva 2014, p. 407).

These issues clearly differentiate our study from the study conducted by Grankvist and Kajonius (2015) and the recent literature and show the novelty and contribution of our study to the relevant marketing literature.

In addition, our paper adds contributions from a methodological point of view. While several studies have incorporated sociodemographic variables as observed heterogeneity into a MXL model (e.g., Rasouli and Timmermans 2016; Greene et al. 2006; Warburg et al. 2006; Bhat and Gossen 2004), the consideration of psychographic variables is sparse. In particular, the consideration of personality variables in MXL models is less researched. To the best of our knowledge, no study has incorporated personality measured by the five factor model as an explanatory variable in a MXL model. Paetz (2016) used personality variables measured by the five factor model to show that personality actually influences consumer preferences. The author uses separate steps to determine segment-specific preferences, e.g., profiling of latent class MNL models with personality and clustering of individual preferences resulting from choice-based conjoint hierarchical Bayes estimates by personality traits. In contrast, our MXL model estimates individual preferences by simultaneously accounting for personality variables. Hence, we are the first to incorporate personality—measured by the five factor model—as observed heterogeneity in a MXL model and, therefore, estimate the influence of personality on individual preferences simultaneously.

We formulate hypotheses regarding the expected personality traits’ influence directions on consumers’ preferences for social product attributes.

Extraversion: Extravert personalities are inter alia described as sociable and social but also as vain and conceited (Goldberg 1990). The FT label considers people, e.g., workers or commodity producers, beneficiaries, corresponding to the social facets of extraversion. In this context, De Raad (2000) determined that extravert persons tend to seize social jobs. However, even other attributes that target vanity could be linked to the FT context. FT products are associated with a higher quality (Renard 2003). Hence, vain or conceited persons tend to choose FT products to differentiate from other people, who buy conventionally traded products. Hence, all these facets suggest the following:

Neuroticism: Neurotic persons have nervous tensions and feel guilt (McCrae and Costa 1987). These individuals are emotionally unstable and oversensitive (Goldberg 1990). Based on the results of a recent study conducted by Peloza et al. (2013), who found that the desire to avoid anticipated guilt is a driver of consumers’ preference for ethical (and, therefore, social) products, we expect a positive relationship to exist between neuroticism and social product preferences. Furthermore, people who exhibit a high neuroticism score are known to have a tendency for social comparison, e.g., passive use of Facebook (Rozgonjuk et al. 2019). Hence, it seems intuitive that neurotic personalities seek general orientation through other persons or organizations. The FLO (Fair Trade Labelling Organization) may operate as such a leader. The FT label conveys safety and security (FairTrade 2018), which should positively affect neurotic persons.

Agreeableness: This personality trait “involves the more humane aspects of humanity” (Digman 1990, p. 422). Agreeable personalities engage in altruistic and caring behavior (Digman 1990, pp. 422–424). Thus, the FT label ensures compliance with the rights of workers and, therefore, corresponds to the facets assigned to the factor agreeableness.

Consciousness: Along with the factor agreeableness, consciousness is perceived as a factor with “moral overtones” (McCrae and John 1992, p. 197). Conscious persons are orderly and set and obey moral standards (Cranford and Smith 1987). The FT label matches in this context because it testifies compliance with moral/social standards. Hence, the preference for the FT label and the factor consciousness should be positively related as follows:

Openness: The factor Openness is related not only to facets, such as openness to feelings and new ideas (Digman 1990, p. 424), but also cultural interest and educational aptitude (Hogan 1986). The FT label symbolizes these facets because commonly, the FT label is relevant for famers, etc. from different cultures from the Global South, e.g., poor or emerging countries. In particular, the educational aptitude of highly open people may strengthen their preference for social product enhancement. The purchase of social products places customers in the role of an ideal, which they may use to educate others regarding social consumption.

Initially, these hypotheses seem weird or even senseless because all personality traits result in the same positive direction of consumer social preferences. However, we must consider that the personality of a consumer is determined by all five personality traits simultaneously. Different personality types, e.g., varying compositions of personality trait levels, could actually yield the same social preferences. For example, we could contrast the social preferences of different personality types, e.g., a consumer’s personality may comprise high levels of extraversion and neuroticism and low levels of agreeability, openness and consciousness, while another consumer may scale low in extraversion and neuroticism and high in agreeability, openness and consciousness. However, even different personality types may actually yield the same total preference for social products. This possibility is highly interesting from a marketing perspective because it provides important information regarding the targeting of markets, e.g., market segmentation.

To determine the respondents’ preferences for social product attributes, we use a discrete choice analysis (e.g., Rao 2014). Here, it is assumed that a choice alternative could be considered a bundle of K (prespecified) attributes, k = 1,…,K, with L_k levels, respectively. In a discrete choice experiment, the respondents evaluate a fixed number J of different alternatives in several choice sets T. In the evaluation of the results, it is assumed that the respondents choose the alternative that provides the greatest (stochastic) utility in a certain choice set t, t = 1,…,T. We rely on random utility theory, which assumes that the (stochastic) utility of a certain alternative j for respondent i in choice set t is decomposed into a deterministic utility component and a random error term as follows:

The deterministic part constitutes the part-worth utilities \(\beta_{i}\) of all (prespecified) attributes (levels) multiplied by the transposed vector of the related attribute levels. If dummy coding for all nonprice attributes and a linear price parameter as well as the accommodation of a ‘no-choice’ parameter is considered, the part-worth parameter vector \(\beta_{j}\) is of length \(\left( {\sum\nolimits_{k = 1}^{K - 1} {(L_{k} - 1)} } \right) + 1 + 1\). In this case, the vector \(x_{jti}\) contains dummy-coding for all nonprice attributes as well as the price level of alternative j in choice set t evaluated by respondent i and a no-choice parameter. Therefore, \(x_{jti}\) has the same length as \(\beta_{i}\). All determinants of the (stochastic) utility that are not incorporated in the deterministic part of the utility are agglomerated in the random error term \(\varepsilon_{jti}\). If the random error term is assumed to be Gumbel distributed, the choice probability \(pr_{{j^{*} ti}}\) of alternative j* is closed-form as follows:where J denotes the (fixed) length of the choice sets.

If we assume that all respondents behave in the same manner, we estimate an aggregated Multinomial Logit (MNL) model and determine aggregated part-worth utilities. Hence, we do not consider unobserved heterogeneity by estimating individual/random parameters or observed heterogeneity by considering that observed variables such as sociodemographics or psychographics may influence respondent’s preferences.

The accommodation of unobserved heterogeneity or even both types of heterogeneity, i.e., observed and unobserved heterogeneity, is ensured within the MXL model. The MXL model’s random parameters can be given via the following equation (Allenby and Ginter 1995):

The respondent’s unobserved heterogeneity is modeled via the random term \(\nu_{i}\), which is assumed to be \(\left( {\sum\nolimits_{k = 1}^{K - 1} {(L_{k} - 1)} } \right) + 1 + 1\)–variate Gaussian distributed with a zero mean and covariance matrix \(\varOmega\). Observed heterogeneity is captured by the vector \(z_{i} ,\) which contains respondent-specific observed variables, such as sociodemographics and psychographics. Its length equals the number of observed variables, H. The effects of those observed respondent-specific variables on the respondents’ part-worth utilities are included in the matrix \(\varGamma\), which is of the format \(\left( {\sum\nolimits_{k = 1}^{K - 1} {(L_{k} - 1)} } \right) + 1 + 1 \times {\text{H}}\). Obviously, the elimination of the first summand of representation (3) degenerates the MXL model into an MXL model that accounts for unobserved heterogeneity only. Although, psychographics are captured as observable heterogeneity, they are not directly observable, similar to demographics, and have to be measured by a personality test (Wedel and Kamakura 2000, p. 7). Abou-Zeid and Ben-Akiva (2014) call these indicators (here: personality test) of the latent variable (here: personality) and illustrate their relationships to the overall utility. As the authors illustrate, it is likely that measurement errors from the personality test influence the results of the MXL model that incorporates psychographics (through a structural equation model) as explanatory variables, i.e., observed heterogeneity. It is likely that measurement errors lead to an attenuation bias in the estimated effects of the personality traits on preferences. That has to be kept in mind for the final interpretation of the results by - for example - the consideration of a lower significance level.¹

The estimation of the part-worth utilities could be performed by maximum (simulated) likelihood estimation (McFadden and Train 2000). If we presume independence across the alternatives and respondents, the log-likelihood function is as follows:where \(\delta_{jti}\) is a dummy-variable that equals 1 if respondent i choses alternative j in choice set t and zero otherwise. \(\phi \left( {\nu |0,\varOmega } \right)\) is the density function of all parameters conditional on the zero mean and covariance matrix \(\varOmega\) of the multivariate Gaussian distribution in formula (3) (Elshiewy et al. 2017, p. 41). Obviously, while the MNL model’s choice probability is of closed form, the MXL model inhibits no closed-form choice probability and the MXL model’s log-likelihood function contains a multidimensional integral. To simplify the evaluation, Monte Carlo simulation, which approximates the integral through to several draws based on the relevant distribution, is highly prominent (Train 2009). A detailed explanation on varying estimation approaches for the MXL model is discussed by Elshiewy et al. (2017).

We conducted an empirical study using the product category of denim jeans in winter 2017/2018. We distributed our questionnaire via an online survey to a representative German sample. The respondents who stated that they buy jeans (our focal product) in general completed the questionnaire, which consisted of three parts. The first part included sociodemographic questions, e.g., the respondents’ age, gender and income. The second part included a personality self-test, which was adopted from Saum-Aldehoff (2012), pp. 190–198. The German personality test by Saum-Aldehoff (2012) is based on the markers for the big-five factor structure of Goldberg (1992) and uses 50 items to describe the five personality traits, e.g., 10 items per personality trait. Using 5-point uni-polar rating scales, each respondent states how -for example- talkative, reserved or shy she/he is. The results of those facets are aggregated to achieve a final score for each factor. The factors’ scores range between − 20 and + 20. For example, if a consumer’s extraversion factor is ∓ 12, the consumer likely has an introvert/extravert personality. The Saum-Aldehoff (2012) test is relatively short and provides a first diagnosis of personality (Saum-Aldehoff 2012, p. 190). Therefore, measurement error in our MXL model that integrates a structural equation model for personality is likely to be prevalent.

The third part was based on a choice task. The choice task consisted of 16 choice sets with a dual-response design. Hence, each respondent faced two questions for each choice occasion. First, each respondent had to choose her or his favorite jeans from four jeans alternatives. Second, each respondent was asked whether she or he would truly buy the previously selected jeans alternative in a current marketplace (cp. Diener et al. 2006, p. 157).

The jeans alternatives were described using the following attributes: brand (Diesel, G-Star, Levi’s, or Replay), price (50€, 90€, 130€, or 170€), design (traditional, trendy) and the inclusion of an FT label (no, yes). The first attribute level serves as the reference category. The attributes (and attribute levels of the design attribute) were chosen in accordance to recent discrete choice experiments in the product category of jeans frequently reported in the literature (e.g., see literature overview by Jin et al. 2010). The considered brands are the most preferred manufacturer denim jeans brands in Germany across gender and age classes (Statista 2015). The price levels were selected as relevant price levels for denim jeans (of regular length) of the considered brands at a famous German online retailer.

In total, 353 respondents completed the survey. We excluded the respondents who selected the same jeans alternative in more than 12 choice sets (= 75%), e.g., always the jeans shown as the second alternative in the first question, or selected the no-buy alternative in the second question. The exclusion of these respondents was performed because such a straight-lining behavior suggests that such respondents did not take the choice task seriously. Hence, biased results could arise if we included the straight-liners in our data base.

The final sample included 293 respondents and closely represents the sociodemographic distribution in Germany. Since (almost) every person in Germany owns jeans (Jeansdirect 2018), we can use the whole German population as a benchmark. Table 1 provides a comparison of the sociodemographic distribution in our sample compared to the distribution in Germany in 2018:

Approimatley 50% of the respondents were female, and the mean age was approximately 44 years. In the sample, approximately 62% of the respondents had a monthly (household) income lower than 2600€, approximately 94% of the respondents lived in a household with a maximum of four persons, and approximately 17% of the respondents held an academic degree.

The mean values of the personality vectors yield a highly agreeable (10.860), highly conscious (10.038), extravert (3.502), open (5.676) and less neurotic (− 2.608) personality structure. These personality results coincide with those of other studies examining the German personality structure (e.g., Schön 2007). We conduct an exploratory factor analysis of the personality traits. The overall Kaiser–Meyer–Olkin index is 0.868, indicating that the sample-data correlation matrix is appropriate for the factor analysis. The five-factor solution yields high factor loadings (approximately 0.6 for extraversion, agreeableness, consciousness, and openness, approximately 0.5 for neuroticism) and a large average extracted variance (0.470). In addition, we observe high reliability as indicated by the internal consistency criteria; that is, Cronbach’s α is 0.746 (Streiner 2003).

Table 2 displays the correlations among our focal individual background variables. We obtained two different types of individual background variables, e.g., continuous and discrete/categorical variables, and, therefore, three types of correlations. (1) Between any two continuous variables, we could simply calculate the Pearson’s correlation coefficient (compare columns 2 and 7 on lines 2 to 6). All personality variables interact, but the correlations are rather small. Neuroticism is the only personality trait that is negatively correlated with all other personality traits as follows: an increasing level of neuroticism leads to decreasing levels of all other personality traits and vice versa. The correlations between age and the personality traits are quite small if they differ from zero at all. This finding argues for the time-stableness of the personality traits, which was already previously discussed (see Sect. 1). (2) Between the continuous variables and binary variables (compare columns 2 and 7 on lines 7 to 10), we calculate the point-biserial correlation. Women yield higher values in all personality traits. The same applies to the higher income class; a higher income corresponds to higher values in all personality traits, except for neuroticism, which is lower. For example, consumers with a monthly household income higher than 2600€ are more extraverted (4.523 versus 2.879) but less neurotic (− 3.360 versus − 2.148) than their corresponding counterparts. People with an academic degree are more open (8.255 versus 5.132) than those without an academic degree. Hence, the sociodemographic drivers of consumers’ preference for social product attributes may be traced to the consumers’ personality traits. (3) Between the binary variables (compare columns 7 and 10 on lines 7 to 10), we assume bivariate normality and calculate the tetrachoric correlation (Günther and Höfler 2006). The directions of the correlations seem plausible; a higher household income corresponds to more household members or an academic degree.

Although many variables are indeed correlated, the degree of correlation is low or moderate. In summary, we observed that there is no issue with multicollinearity, providing a sound basis for the estimation of the MXL model.

Thus far, we discovered the driving potential of personality traits for customers’ social product preferences. However, the question of how marketing managers could use this information to derive successful marketing strategies in the context of social consumption emerges. The following small simulation study should provide further insight into this topic.

We used a data set of German respondents, and therefore, we focus on the personality structures in Germany in our further research. In particular, we consider the personality differences between southern Germans and northern Germans and between western Germans and eastern Germans to derive geographic-specific marketing strategies, i.e., geographical market segmentation. Obschonka et al. (2018) created a psychological map of Germany. These authors used the five factor model to determine the respondents’ personality and checked common “prejudices in the relation to the inhabitants of individual region of Germany” (Obschonka et al. 2018, p. 1), e.g., agreeable southern Germans or introverted east Germans. The authors revealed that east Germans are less open, more neurotic and less extraverted than western Germans. In contrast to northern Germans, southern Germans were more agreeable. Interestingly, the authors did not highlight regional, e.g., south-north or east–west, differences in the personality trait “consciousness”.

Based on these results in the literature, we focus on four personality types, e.g., east Germans (type 1), western Germans (type 2), southern Germans (type 3) and northern Germans (type 4), to derive managerial marketing implications in the context of geographic market segmentation. To create these personality types, we rely on the mean values of our samples’ personality factors and add resp. subtract half of the standard deviations of the relevant personality traits to determine the personality types. Table 7 shows the resulting personality factor values.

All personality traits that are not varied for a specific personality type are set to the sample’s average values. Compared to the sample’s mean-respondent, personality type 2 (western Germans) is more open, more extraverted and less neurotic, while type 4 (northern Germans) is less agreeable. Following our purpose to ostensibly highlight the personality characteristics of social consumers, we do not consider sociodemographic differences between those different personality types.

For our simulation study, we assume an initial market that consists of an outside good and three products chosen in accordance with topical prices and modifications on a famous German online retailer for clothes as follows:

We calculate personality type-specific preferences based on the results of the MXL+ model and use the logit model’s share-of-choice rule. To stay consistent with the estimation, we also considered unobserved heterogeneity. Therefore, we integrate over the heterogeneity distribution. We already observed that the choice probabilities of the MXL model do not have a closed-form, and thus, the integral also does not have a closed-form. Hence, we must employ a numerical approximation to evaluate the integral (Dong and Koppelman 2014, p. 45). We used a Monte Carlo simulation and considered 100,000 draws to render the simulation error negligible.⁵

For the purpose of simplicity, we consider the same market volume of all four German regions, i.e., of all personality-type specific segments.

In the initial market, none of the products includes an FT label. The second line in Table 8 shows the resulting overall choice shares in this initial scenario. While the Replay jeans have the highest choice share, the G-Star’s jeans have a choice share that is approximately half that of the Replay jeans. The Replay jeans have a dominant choice share that could be traced to its (currently) low-price strategy. The market share of the outside good is 26.59%.

We assume that the marketing manager of G-Star attempts to gain a competitive advantage by enhancing its jeans with an FT label. This strategy is not far-fetched as Graf and Wirl (2014) determined that increasing completion drives companies to engage in corporate social responsibility activities. The modified jeans of G-Star with the FT label replace G-Star’s jeans in the initial market scenario. As illustrated in Table 8, the jeans of G-Star could gain choice shares from both its direct competitors as well as from the outside good. Actually, the choice share of the outside good decreased to 20.60%. Hence, G-Star’s introduction of FT label jeans increased the market volume. Consumers now entered the jeans market explicitly due to the introduction of FT jeans.

Overall, G-Star’s jeans have now outpaced Levi’s jeans and yield a market share that is only 4.73 percentage points lower than the market share of the market leader, Replay. Overall, the competitive brands lose market shares of 1.64 (Levi’s) and 1.86 (Replay) percentage points.

The enhancement of the G-Star’s jeans with an FT label varies in its effects across the personality types. While G-Star’s jeans gain less than the overall gain of 9.49 percentage points in the personality type segments 1 and 4, personality type segments 2 and 3 yield increases in the choice shares of 10.20 and 9.92 percentage points, respectively. Hence, ceteris paribus, type 2 and type 3 are more sensitive to the enhancement than their corresponding counterparts. However, G-Star’s jeans modification is the most successful in western Germany (type 2), where the inhabitants are more open and more extraverted.

To gain further insight, we calculated the sum of absolute deviations in the personality type-specific choice shares for the initial market and the new market scenarios in a pairwise manner. The results are illustrated in Table 9. The upper triangle corresponds to personality type-specific differences in the initial market scenario, and the lower triangle yields the results for the new market scenario.

As illustrated in Table 9, the differences between type 1 and type 3, as well as between type 2 and type 4, are the lowest in both the initial and the new market scenarios. This finding supports the argument that the combination of the personality traits of (less/high) extraversion, (less/high) openness, and (high/low) neuroticism and the sole personality trait of (high/less) agreeableness lead to identical preference directions. This effect is further maintained by the parameter estimates shown in Table 4 that yield almost identical interaction effects between personality traits and social preferences for all significant personality traits, e.g., all interactions effects lie within a range of 0.005.

Thus, we confirm our assumption (compare Sect. 2.3) that even different personality types may yield the same total preference for social product enhancements, and we show that this is quite important for the derivation of marketing strategies.