The Impact of Phantom Decoys on Choices and Perceptions

Phantoms are dominating, attractive alternatives that are unavailable at the time of choice. They occupy different positions in the attribute space, and their unavailability can be either known or unknown to individuals. Although different theories have offered explanations for the influence that phantoms exert on individual choices, they have largely overlooked phantom knowledge. Contradictory predictions can be drawn from these theories, and none provides a good account of the pattern of effects that emerges from our data. We suggest that these contradictions appear because the different theories do not address phantom location and knowledge jointly. When considering phantom knowledge together with location, we observe a consistent overall pattern of effects that encompasses all predictions that could be made on the basis of each theory. We find that known phantoms are stronger when close, and favor the target product, whereas unknown phantoms are stronger when far, and favor the competitor. Finally, we look beyond shifts in choice shares and find that phantom decoys can also affect individuals' post‐choice evaluations and reactions in terms of perceived justice, decision satisfaction, and repatronage intention. Our results show that post‐choice evaluations are driven by phantom knowledge, not phantom location. Copyright © 2012 John Wiley & Sons, Ltd.     

The Phantom Decoy Effect in Perceptual Decision Making

A phantom decoy is an alternative that is superior to another “target” option but is unavailable at the time of choice. In value‐based decisions involving phantom decoys (e.g., consumer choices), individuals often show increased preference for the similar, inferior target option over a non‐dominated competitor alternative. Unlike value‐based decisions that are driven by subjective goals, perceptual decisions typically have an outside criterion that defines the goal of the task (e.g., target is present or absent). Despite their obvious differences, past research has documented a number of commonalities between both types of decisions. In a set of three experiments, we examine the influence of phantom options on simple perceptual decisions and point out a critical difference between perceptual and value‐based decisions. Our results show that in perceptual choice, participants prefer competitor options to target options, the opposite of the pattern typically found in consumer choice. We use the results of the experiments to examine the predictions of four different models of context effects including loss aversion and dynamic, preference accumulation models. We find that accumulation models provide the best explanation for our results as well as being able to generalize to other context effects. Copyright © 2015 John Wiley & Sons, Ltd.     

Testing alternative explanations of phantom decoy effects

Phantom decoys are alternatives that asymmetrically dominate a targeted alternative and yet lead to increased selection of the target when the decoy is declared to be unavailable. This effect is difficult to explain within most standard theoretical accounts of decoy effects. The current experiments tested between three explanations of this effect: (1) the relative advantage model based on loss aversion, (2) similarity substitution, and (3) range weighting. In Experiment 1, participants were presented trinary choice sets, with half of the sets containing a phantom decoy in one of five possible locations within the attribute space. Phantom decoy effects were robust across all decoy locations but one, and the pattern of effects most closely corresponded to predictions of the relative advantage model. Experiment 2 used a within‐subjects manipulation of the five phantom decoy locations. The overall pattern of effects most closely corresponded to predictions from the relative advantage model, as did the pattern for the group of participants who exhibited the strongest phantom decoy effects. Copyright © 2007 John Wiley & Sons, Ltd.     

A generalized distance function for preferential choices

Many cognitive theories of judgement and decision making assume that choice options are evaluated relative to other available options. The extent to which the preference for one option is influenced by other available options will often depend on how similar the options are to each other, where similarity is assumed to be a decreasing function of the distance between options. We examine how the distance between preferential options that are described on multiple attributes can be determined. Previous distance functions do not take into account that attributes differ in their subjective importance, are limited to two attributes, or neglect the preferential relationship between the options. To measure the distance between preferential options it is necessary to take the subjective preferences of the decision maker into account. Accordingly, the multi‐attribute space that defines the relationship between options can be stretched or shrunk relative to the attention or importance that a person gives to different attributes describing the options. Here, we propose a generalized distance function for preferential choices that takes subjective attribute importance into account and allows for individual differences according to such subjective preferences. Using a hands‐on example, we illustrate the application of the function and compare it to previous distance measures. We conclude with a discussion of the suitability and limitations of the proposed distance function.     

Effects of ego-depletion on choice behaviour in a multi-attribute decision task

When a choice has to be made between two options and decision-relevant information about the options is completely available, the Take-The-Best (TTB) heuristic only considers the most important information that discriminates between the options and bases its choice on it. Choices in line with TTB thus allow a decision maker to save time and effort, and they may become more likely therefore under conditions of limited self-control strength (ego-depletion). Ego-depletion was manipulated prior to making a series of choices in a multi-attribute decision task. Choices could have been in line with either TTB or more effortful compensatory decision strategies. As predicted, compared with non-depleted participants, ego-depleted participants were more likely to make TTB-consistent choices.     

Take-the-best and the influence of decision-inconsistent attributes on decision confidence and choices in memory-based decisions

Take-the-best (TTB) is a decision strategy according to which attributes about choice options are sequentially processed in descending order of validity, and attribute processing is stopped once an attribute discriminates between options. Consequently, TTB-decisions rely on only one, the best discriminating, attribute, and lower-valid attributes need not be processed because they are TTB-irrelevant. Recent research suggests, however, that when attribute information is visually present during decision-making, TTB-irrelevant attributes are processed and integrated into decisions nonetheless. To examine whether TTB-irrelevant attributes are retrieved and integrated when decisions are made memory-based, we tested whether the consistency of a TTB-irrelevant attribute affects TTB-users’ decision behaviour in a memory-based decision task. Participants first learned attribute configurations of several options. Afterwards, they made several decisions between two of the options, and we manipulated conflict between the second-best attribute and the TTB-decision. We assessed participants’ decision confidence and the proportion of TTB-inconsistent choices. According to TTB, TTB-irrelevant attributes should not affect confidence and choices, because these attributes should not be retrieved. Results showed, however, that TTB-users were less confident and made more TTB-inconsistent choices when TTB-irrelevant information was in conflict with the TTB-decision than when it was not, suggesting that TTB-users retrieved and integrated TTB-irrelevant information.     

A Brief History of Research on Phantom Alternatives: Evidence for Seven Empirical Generalizations About Phantoms

Phantom alternatives (unavailable options) can appear in many common decision tasks and can influence a wide variety of everyday behaviors. Although the term phantom is of recent vintage, researchers have investigated psychological reactions to unavailable alternatives for almost 60 years. In this article, we review 13 domains of research on unavailable alternatives to identify seven empirical generalizations about phantoms, These generalizations call into questions some basic assumptions of formal choice theory and suggest new research directions for studying phantom options.     

Effects of Two Selection Batteries on Decoy Effects in Job-Finalist Choice1

The decoy effect occurs when manipulation of an inferior option influences preferences between two superior options. Although this phenomenon has been demonstrated for choices among job finalists, it has not been tested in situations in which candidates enter the final stage of selection on uneven ground. The results of the present investigation suggest that information from the first stage of selection interacts with manipulation of the decoy's characteristics to influence choice. Specifically, the frequency with which the targeted option was chosen for a job depended on whether the target was also the highest ranked candidate entering the final stage of selection. Results also suggest significant effects of nondominated decoys on choice. Practical implications and suggestions for future research are discussed.     

Eye Movements in Risky Choice

We asked participants to make simple risky choices while we recorded their eye movements. We built a complete statistical model of the eye movements and found very little systematic variation in eye movements over the time course of a choice or across the different choices. The only exceptions were finding more (of the same) eye movements when choice options were similar, and an emerging gaze bias in which people looked more at the gamble they ultimately chose. These findings are inconsistent with prospect theory, the priority heuristic, or decision field theory. However, the eye movements made during a choice have a large relationship with the final choice, and this is mostly independent from the contribution of the actual attribute values in the choice options. That is, eye movements tell us not just about the processing of attribute values but also are independently associated with choice. The pattern is simple—people choose the gamble they look at more often, independently of the actual numbers they see—and this pattern is simpler than predicted by decision field theory, decision by sampling, and the parallel constraint satisfaction model. © 2015 The Authors. Journal of Behavioral Decision Making published by John Wiley & Sons Ltd.     

Preference reversal in multiattribute choice

A central puzzle for theories of choice is that people's preferences between options can be reversed by the presence of decoy options (that are not chosen) or by the presence of other irrelevant options added to the choice set. Three types of reversal effect reported in the decision-making literature, the attraction, compromise, and similarity effects, have been explained by a number of theoretical proposals. Yet a major theoretical challenge is capturing all 3 effects simultaneously. We review the range of mechanisms that have been proposed to account for decoy effects and analyze in detail 2 computational models, decision field theory (Roe, Busemeyer, & Townsend, 2001) and leaky competing accumulators (Usher & McClelland, 2004), that aim to combine several such mechanisms into an integrated account. By simulating the models, we examine differences in the ways the decoy effects are predicted. We argue that the LCA framework, which follows on Tversky's relational evaluation with loss aversion (Tversky & Kahneman, 1991), provides a more robust account, suggesting that common mechanisms are involved in both high-level decision making and perceptual choice, for which LCA was originally developed.     

Decision ecology: Foraging and the ecology of animal decision making

In this article, I review the approach taken by behavioral ecologists to the study of animal foraging behavior and explore connections with general analyses of decision making. I use the example of patch exploitation decisions in this article in order to develop several key points about the properties of naturally occurring foraging decisions. First, I argue that experimental preparations based on binary, mutually exclusive choice are not good models of foraging decisions. Instead, foraging choices have a sequential foreground-background structure, in which one option is in the background of all other options. Second, behavioral ecologists view foraging as a hierarchy of decisions that range from habitat selection to food choice. Finally, data suggest that foraging animals are sensitive to several important trade-offs. These trade-offs include the effects of competitors and group mates, as well as the problem of predator avoidance.     

Go big or go home: Risk seeking for experiential choices

In decision making under risk, do consumers evaluate intangible, experiential options in a choice set in the same way they evaluate tangible, material options? Prior research on prospect theory, typically using either monetary or material objects as choice options, demonstrates that consumers are risk averse for choices involving gains, with a fairly robust tendency to favor a more certain outcome even when that outcome is less desirable. The present research focuses on decision making under risk for experiential options (from movies to concert tickets to hotel stays)—identifying choices between experiential options as a realm in which prospect theory's pattern of risk aversion is weakened and sometimes reversed. Across six studies, this research demonstrates that consumers are more risk seeking for experiential choices and thus more likely to prefer more desirable options, even options that are less certain. Further, the stronger personal connection fostered by experiential (vs. material) choice options mediates risk‐seeking preferences. This work demonstrates a moderator for prospect theory and investigates the tendency toward increased risk seeking among experiential options, in this paper termed a “go big or go home” strategy. Conversely, consistent risk aversion is evidenced for choices involving material options (from clothing to accessories and furniture).     

Asymmetric dominance and phantom decoy effects in games

In individual choices between alternatives x and y, the availability of a third alternative z, judged inferior to x but not to y, tends to increase preferences for x. Two experiments investigated corresponding strategic asymmetric dominance effects in games. In Experiment 1, 72 players chose strategies in six symmetric 3 × 3 games, each having one strategy dominating just one other, or in reduced 2 × 2 games constructed by deleting the dominated strategies. Asymmetrically dominated strategies, even when unavailable (phantom decoy), increased choices of the strategies that dominated them and bolstered decision confidence. In Experiment 2, 81 participants played 12 similar but asymmetric games with or without dominated strategies, and similar asymmetric dominance, phantom decoy, and confidence effects were found.     

The Effects of Decoys on Preference Shifts: The Role of Attractiveness and Providing Justification

The relative preference for a target product over a competitor can be increased by providing a third alternative (a “decoy”) that is clearly inferior to the target but is not necessarily inferior to the competitor. In 3 experiments, we examined the conditions in which these decoy effects occur. When participants reported their preferences immediately after being exposed to the information about them, the influence of decoys on preferences was attributable to the justification they provided for choosing the target over the competitor. (That is, a decoy had an impact if and only if the target was superior to the decoy but the competitor was not.) When participants evaluated each product individually before making their choices, however, they based their preferences on these evaluations. In this case, decoys exerted their influence through their impact on the values that participants assigned to the attributes on which the evaluations were based. This influence was evident even when the decoy was clearly inferior to both the target and competitor. Moreover, it occurred under conditions in which the target and competitor were in different product categories and also when the decoy was in a totally different product domain than the target and competitor.     

Stating Preference for the Ethereal but Choosing the Concrete: How the Tangibility of Attributes Affects Attribute Weighting in Value Elicitation and Choice

Marketers routinely make use of stated consumer preferences and the relative attribute‐importance weights implied by these preferences when making decisions on issues such as advertising messages and product design. Using this information as a basis for managerial decision making is risky, though, if stated preferences diverge from actual choices. Practical evidence that such a divergence is of concern is provided by the current trend toward the use of stated choice‐based conjoint analysis. This article examines differences between the attribute‐importance weights consumers use during value elicitation and the attribute weights revealed to influence actual choice. The results of an empirical analysis of automobile stated preference and purchase decisions, and an experiment and subsequent qualitative analysis of wine choice, converge to suggest that consumers’ attribute weightings differ in value elicitation versus choice in a reliable manner. Specifically, we demonstrate a tangibility effect—the tendency for tangible attributes to be weighted relatively more heavily than intangible attributes in choice as compared to in value elicitation. The process underlying the tangibility effect is discussed, as are the implications for researchers and managers.     

Should you Sleep on it? The Effects of Overnight Sleep on Subjective Preference‐based Choice

Conventional wisdom and studies of unconscious processing suggest that sleeping on a choice may improve decision making. Although sleep has been shown to benefit several cognitive tasks, including problem solving, its impact on everyday choices remains unclear. Here we explore the effects of ‘sleeping on it’ on preference‐based decisions among multiple options. In two studies, individuals viewed several attributes describing a set of items and were asked to select their preferred item after a 12‐hour interval that either contained sleep or was spent fully awake. After an overnight period including sleep, individuals showed increases in positive perceptions of the choice set. This finding contrasts with previous research showing that sleep selectively enhances recall for negative information. In addition, this increase in positive recall did not translate into a greater desire to purchase their preferred item or into an overall benefit for choice satisfaction. Time‐of‐day controls were used to confirm that the observed effects could not be explained by circadian influences. Thus, we show that people may feel more positive about the choice options but not more confident about the choice after ‘sleeping on’ a subjective decision. We discuss how the valence of recalled choice set information may be important in understanding the effects of sleep on multi‐attribute decision making and suggest several avenues for future research. Copyright © 2015 John Wiley & Sons, Ltd.     

Does the brain calculate value?

How do people choose between options? At one extreme, the 'value-first' view is that the brain computes the value of different options and simply favours options with higher values. An intermediate position, taken by many psychological models of judgment and decision making, is that values are computed but that the resulting choices depend heavily on the context of available options. At the other extreme, the 'comparison-only' view argues that choice depends directly on comparisons, with or even without any intermediate computation of value. In this paper, we place past and current psychological and neuroscientific theories on this spectrum, and review empirical data that have led to an increasing focus on comparison rather than value as the driver of choice.     

Using decoy effects to influence an online brand choice: the role of price-quality trade-offs

This research aims to investigate decoy effects on online brand choices. To assess the influence of decoys, we test decoy effects on three constructs-product involvement, judgment conditions, and decoy conditions-within an online experiment. A survey of 635 Internet users and a 2?×?2?×?3 ANOVA between-subjects experimental design is used to guide the research design and the systematic analysis procedure. A major finding of this study is that a standard decoy seems to have a significant effect on an advertised (target) brand for high-involvement products; from the survey, it is also apparent that competitors can also use inferior decoys to increase brand preference for low-involvement products.     

Choice-Process Satisfaction: The Influence of Attribute Alignability and Option Limitation

This research investigates how choice-process satisfaction is influenced by limitation of choice option and by the types of features used to represent the options. Studies of choice satisfaction have focused on how satisfied the decision maker feels about the choice that has been made and have overlooked the importance of the process through which the decision maker makes a choice, i.e., choice-process satisfaction. We show that the comparability of choice options through alignable features increases choice-process satisfaction, whereas option limitation (i.e., making one option unavailable from a set of equally attractive options) decreases choice-process satisfaction. Further, this decrease in satisfaction, relative to all options being available, occurs for people who are given a set of options in which the difference features are alignable (i.e., differences of a corresponding dimension) but not for people who are given a set of options in which the difference features are nonalignable (i.e., differences of unique dimensions). We propose that alignable differences are easier to compare and have more weight in people's attribute processing, and thus give rise to a perception of a greater amount of information about the option set that is relevant for choice. Making an option unavailable in this case would have a bigger impact than in a situation in which all options have nonalignable differences. Nonalignable differences are difficult to process and are less likely to make people aware that there is very much information about the options for decision making. This explanation and the interaction effect between option limitation and feature alignability are tested in four experiments.