Journal ArticleDOI
A Rational Reconstruction of the Compromise Effect: Using Market Data to Infer Utilities
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In this article, a decision rule that is based on consumers' inferences about their personal valuation of alternatives from the portfolio of market offerings and some information about their own relative tastes is presented.Abstract:
This article explores the possibility that consumers use market data to make inferences about product utilities The argument is made by means of an example based on the “compromise effect” found in extant experimental data This phenomenon is generally looked at as a manifestation of deviations from rationality in choice However, assuming full rationality, I describe a decision rule that is based on consumers' inferences about their personal valuation of alternatives from the portfolio of market offerings and some information about their own relative tastes Through a number of examples, I will argue that consumers often use this or similar decision rules to make inferences about utility I then show that the decision rule may generate compromise effects in experiments and that it may be sustainable The compromise effect could therefore be seen as preliminary evidence that consumers make such inferencesread more
Citations
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Constructive Consumer Choice Processes
TL;DR: In this paper, the authors argue that consumer choice is inherently constructive, and that consumers often do not have well-defined existing preferences, but construct them using a variety of strategies contingent on task demands.
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Salience and Consumer Choice
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Journal ArticleDOI
Salience and Consumer Choice
TL;DR: In this paper, the authors present a theory of context-dependent choice in which a consumer's attention is drawn to salient attributes of goods, such as quality or price, and their choices are tilted toward goods with higher quality/price ratios.
Journal ArticleDOI
Electronic Tickets, Smart Cards, and Online Prepayments: When and How to Advance Sell
Jinhong Xie,Steven M. Shugan +1 more
TL;DR: In this article, the authors show that the profits of advance selling do not come from buyer surplus, but from more buyers being able to purchase, and that sellers without the ability to price discriminate can use advance selling to improve profits.
Reasons as Carriers of Culture: Dynamic vs. Dispositional Models of Cultural Influence on Decision Making. Рассуждения как носители культуры: динамическая и диспозитная модели культурного влияния на принятие решений
TL;DR: In this article, the authors propose a framework for the evaluation of the quality of the data collected by the data collection system of a data aggregation system. But they do not specify the parameters of the system itself.
References
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Journal ArticleDOI
Choice Based on Reasons: The Case of Attraction and Compromise Effects
TL;DR: In this paper, the authors proposed that consumers select the alternative supported by the best reasons and provided an explanation for the so-called attraction effect and led to the prediction of a compromise effect.
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Contingent weighting in judgment and choice
TL;DR: This article developed a hierarchy of models in which the tradeoff between attributes is contingent on the nature of the response, and applied this theory to the analysis of various compatibility effects, including the choice-matching discrepancy and the preference-reversal phenomenon.
Journal ArticleDOI
Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis.
TL;DR: This paper showed that adding an asymmetrically dominated alternative to a choice set can increase the probability of choosing the item that dominates it, which points to the inadequacy of many current choice models and suggests product line strategies that might not otherwise be intuitively plausible.
Journal ArticleDOI
Context-dependent preferences
Amos Tversky,Itamar Simonson +1 more
TL;DR: The authors present a context-dependent model that expresses the value of each option as an additive combination of two components: a contingent weighting process that captures the effect of the background context, and a binary comparison process that describes the local context.
Journal ArticleDOI
Market Boundaries and Product Choice: Illustrating Attraction and Substitution Effects
Joel Huber,Christopher P. Puto +1 more
TL;DR: In this paper, the authors show that choice patterns conflict with current theoretical and common-sense ideas about the effect of added alternatives on choice, and that the added alternatives' choice patterns are strongly influenced by the choice set boundaries.