Asymmetric dominance and the stability of constructed preferences

Judgment and Decision Making, Vol. 11, No. 3, May 2016, pp. 213–222 Asymmetric dominance and the stability of constructed preferences Anyuan Shen∗ Shuguang Liu† Abstract In this research, we explore how experience with an "attraction set" of options, designed to elicit an asymmetric-dominance (attraction) effect, affects choice making in a second "compromise set" designed to elicit a compromise effect. In Experiment 1, when a compromise set was presented, subjects who had chosen an asymmetrically dominating option from an attraction set were less likely to surrender to the compromise heuristic than their counterparts who had chosen the equivalent option from a binary set. Lower susceptibility to the compromise heuristic suggests that asymmetric dominance might have facilitated the learning of attribute preferences. In Experiment 2, subjects were asked to make six choices in the personal computer category. Subjects who had chosen any number of asymmetrically dominating options from the attraction condition were less susceptible to the compromise heuristic in a subsequent choice task than their counterparts who had chosen the same number of equivalent options from the binary condition. It was unlikely that the effect was caused by better memory of asymmetrically dominating options subjects had previously chosen. Results from the two experiments corroborated the reasoning that asymmetric dominance affects the learning of attribute weights and this effect persists in a subsequent choice task. Keywords: choice set, attribute preference, asymmetric dominance, compromise heuristic, preference learning, preference stability. 1 Introduction Consumer choices are significantly influenced by how the choice set is structured (Bettman, Luce & Payne, 1998). Consider a choice set with two options, a target option A and a competitor option B, defined in terms of two attributes so that neither option outperforms the other option on both attributes. In this paper, we refer to the choice set [A, B] with two non-dominated options as a binary set. Now, add a third option to the binary set to form a choice set with three options: the target option A, the competitor option B, and a decoy option A’ which is dominated by option A but not by option B. In this paper, we refer to the choice set [A, A’, B] as an attraction set. The addition of the asymmetrically dominated decoy option A’ will significantly increase the choice share of option A at the cost of option B, a phenomenon known as the attraction effect (Huber, Payne & Puto, 1982; Huber & Puto, 1983; Ratneshwar, Shocker & Stewart, 1987). The attraction effect is referred to as a type of context effect because the biased choice-set structures can induce predictable changes in choice shares among options in the choice set, providing strong evidence that consumer preference formation is influenced by the choice conThe authors are thankful to the State University of New York at New Paltz for funding through a Research and Creative Project award. Copyright: © 2016. The authors license this article under the terms of the Creative Commons Attribution 3.0 License. ∗ School of Business, the State University of New York at New Paltz. Email: . † School of Business, State University of New York at New Paltz. Email: . text (e.g., Bettman et al., 1998; Simonson & Tversky, 1992; Slovic, 1995). In this research, we discuss context effects from a different perspective. Our questions are: if preference for an asymmetrically dominating option is contextually constructed, should this preference carry over to a subsequent biased choice set of a different type (i.e., compromise) and, if so, how? Specifically, are subjects who prefer the asymmetrically dominating option A from an attraction set [A, A’, B] more likely or less likely to surrender to the compromise heuristic when, subsequently, facing a compromise set [A, C, B] or [B, C, A]? There are theoretical and practical reasons why these questions need to be raised. Theoretically, conflicting predictions may be justified based on extant literature (more discussion in the Conceptual Background section). For example, one can come forward with two mutually exclusive predictions: P1: Subjects who prefer the asymmetrically dominating option A from an attraction set [A, A’, B] should be more likely to prefer the compromise option C. This is so because the preference for A in the earlier choice, induced by the context (i.e., asymmetric dominance) in which the choice heuristic discourages attribute tradeoff and learning, will result in higher uncertainty about attribute preferences. Subjects who are more uncertain about their attribute preferences will be more likely to surrender to the compromise heuristic. P2: Subjects who prefer the asymmetrically dominating option A from an attraction set [A, A’, B] should be less likely to prefer the compromise option C. This is so be- 213 Judgment and Decision Making, Vol. 11, No. 3, May 2016 cause the preference for A in the earlier choice, induced by the context (i.e., asymmetric dominance) in which choice is reached through tradeoff contrast of attributes, will result in higher certainty about attribute preferences. Subjects who are more certain about their attribute preferences will be less likely to surrender to the compromise heuristic. Practically, moving from one choice context to another choice context is a highly realistic scenario of preference construction for comparison shoppers, especially when shopping online. For example, a consumer who visits a company’s website to buy a laptop computer may use its filtering tools to specify clear attribute preferences (e.g., screen size, hard drive capacity) and receive a preliminary list of laptop options that satisfy these preferences. The consumer can then focus on figuring out the less clear attribute preferences (e.g., RAM memory, CPU processor) by selecting options to form a choice set for side-by-side comparison. Obviously, choice contexts have a role to play in this individual consumer’s preference formation. In the rest of the paper, we first review the literature on attraction effect to provide a conceptual background for the conflicting predictions presented above. We then present two experiments designed to test the conflicting hypotheses and report results we obtained. Finally, we draw conclusions and discuss the ramifications of our research findings. 1.1 Conceptual background for the conflicting hypotheses While it may be assumed that context effects should exist only in their respective context (as implied by the modifier “context”), researchers have recently demonstrated interest in exploring whether context effects have the ability to go beyond their original context and exert influence on a subsequent choice task (e.g., Bettman, Luce & Payne, 2008; Simonson, 2008). Research has returned mixed results, with contradictory reports of constructed preference enduring up to years (Sharot, Fleming, Yu, (...truncated)