IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v115y2012i3p435-437.html
   My bibliography  Save this article

The relevance of irrelevant alternatives

Author

Listed:
  • Kroll, Eike Benjamin
  • Vogt, Bodo

Abstract

In an experimental setting, subjects face a standard elicitation task for certainty equivalents. We show that when a third, objectively irrelevant, option is added to the standard task, the willingness to take risks increases.

Suggested Citation

  • Kroll, Eike Benjamin & Vogt, Bodo, 2012. "The relevance of irrelevant alternatives," Economics Letters, Elsevier, vol. 115(3), pages 435-437.
    • Handle: RePEc:eee:ecolet:v:115:y:2012:i:3:p:435-437
    DOI: 10.1016/j.econlet.2011.12.124
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176511006471
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2011.12.124?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:bla:jecsur:v:16:y:2002:i:5:p:621-55 is not listed on IDEAS
    2. Simonson, Itamar, 1989. "Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 158-174, September.
    3. Robin Cubitt, 2005. "Experiments and the domain of economic theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 12(2), pages 197-210.
    4. Doron Sonsino, 2010. "The irrelevant-menu affect on valuation," Experimental Economics, Springer;Economic Science Association, vol. 13(3), pages 309-333, September.
    5. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    6. Roth, Alvin E., 1977. "Independence of irrelevant alternatives, and solutions to Nash's bargaining problem," Journal of Economic Theory, Elsevier, vol. 16(2), pages 247-251, December.
    7. Payne, John W & Bettman, James R & Schkade, David A, 1999. "Measuring Constructed Preferences: Towards a Building Code," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 243-270, December.
    8. Tversky, Amos & Thaler, Richard H, 1990. "Anomalies: Preference Reversals," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 201-211, Spring.
    9. Loomes, Graham & Sugden, Robert, 1987. "Some implications of a more general form of regret theory," Journal of Economic Theory, Elsevier, vol. 41(2), pages 270-287, April.
    10. Slovic, Paul & Lichtenstein, Sarah, 1983. "Preference Reversals: A Broader Perspective," American Economic Review, American Economic Association, vol. 73(4), pages 596-605, September.
    11. Grether, David M & Plott, Charles R, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 69(4), pages 623-638, September.
    12. David J. Butler & Graham C. Loomes, 2007. "Imprecision as an Account of the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 97(1), pages 277-297, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Crosetto, Paolo & Gaudeul, Alexia, 2016. "A monetary measure of the strength and robustness of the attraction effect," Economics Letters, Elsevier, vol. 149(C), pages 38-43.
    2. Gaudeul, A. & Crosetto, P., 2019. "Fast then slow: A choice process explanation for the attraction effect," Working Papers 2019-06, Grenoble Applied Economics Laboratory (GAEL).
    3. Castillo, Geoffrey, 2020. "The attraction effect and its explanations," Games and Economic Behavior, Elsevier, vol. 119(C), pages 123-147.
    4. Marcel Lichters & Marko Sarstedt & Bodo Vogt, 2015. "On the practical relevance of the attraction effect: A cautionary note and guidelines for context effect experiments," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 5(1), pages 1-19, June.
    5. Marcel Lichters & Marko Sarstedt & Bodo Vogt, 2015. "On the practical relevance of the attraction effect: A cautionary note and guidelines for context effect experiments," AMS Review, Springer;Academy of Marketing Science, vol. 5(1), pages 1-19, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Drew Fudenberg & David K. Levine & Zacharias Maniadis, 2012. "On the Robustness of Anchoring Effects in WTP and WTA Experiments," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 131-145, May.
    2. Attema, Arthur E. & Brouwer, Werner B.F., 2013. "In search of a preferred preference elicitation method: A test of the internal consistency of choice and matching tasks," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 126-140.
    3. Kim, Younjun, 2015. "Essays on firm location decisions, regional development and choices under risk," ISU General Staff Papers 201501010800005579, Iowa State University, Department of Economics.
    4. repec:cup:judgdm:v:13:y:2018:i:3:p:217-236 is not listed on IDEAS
    5. Han Bleichrodt & Peter P. Wakker, 2015. "Regret Theory: A Bold Alternative to the Alternatives," Economic Journal, Royal Economic Society, vol. 0(583), pages 493-532, March.
    6. David J. Butler & Ganna Pogrebna, 2018. "Predictably intransitive preferences," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(3), pages 217-236, May.
    7. Marek Kapera, 2022. "Learning own preferences through consumption," KAE Working Papers 2022-074, Warsaw School of Economics, Collegium of Economic Analysis.
    8. Carlos Alós-Ferrer & Alexander Jaudas & Alexander Ritschel, 2021. "Attentional shifts and preference reversals: An eye-tracking study," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 16(1), pages 57-93, January.
    9. Holger Müller & Eike Kroll & Bodo Vogt, 2012. "Do real payments really matter? A re-examination of the compromise effect in hypothetical and binding choice settings," Marketing Letters, Springer, vol. 23(1), pages 73-92, March.
    10. repec:cup:judgdm:v:16:y:2021:i:1:p:57-93 is not listed on IDEAS
    11. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013. "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
    12. Kobi Kriesler & Shmuel Nitzan, 2009. "Framing-based Choice: A Model of Decision-making Under Risk," Korean Economic Review, Korean Economic Association, vol. 25, pages 65-89.
    13. Bruno S. Frey & Reiner Eichenberger, 1989. "Should Social Scientists Care about Choice Anomalies?," Rationality and Society, , vol. 1(1), pages 101-122, July.
    14. D.J. Butler, 1990. "Experimental Techniques in Economics: Some lessons to date," Economics Discussion / Working Papers 90-22, The University of Western Australia, Department of Economics.
    15. Hammond, Peter J & Zank, Horst, 2013. "Rationality and Dynamic Consistency under Risk and Uncertainty," The Warwick Economics Research Paper Series (TWERPS) 1033, University of Warwick, Department of Economics.
    16. Gregory B. Pollock & Keith A. Lewis, 1993. "Gambling in a Malthusian Universe," Rationality and Society, , vol. 5(1), pages 85-106, January.
    17. Marc Willinger, 1990. "La rénovation des fondements de l'utilité et du risque," Revue Économique, Programme National Persée, vol. 41(1), pages 5-48.
    18. Hela Maafi, 2011. "Preference Reversals Under Ambiguity," Management Science, INFORMS, vol. 57(11), pages 2054-2066, November.
    19. Raphaël Giraud, 2005. "Anomalies de la théorie des préférences. Une interprétation et une proposition de formalisation," Revue économique, Presses de Sciences-Po, vol. 56(4), pages 829-854.
    20. Zhuzhu Zhou, 2024. "Ranking blame," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(2), pages 403-441, September.
    21. Raúl López-Pérez & Eli Spiegelman, 2020. "Using Eye-Tracking Techniques To Understand The Role Of Attention On Choice And Reversals," Working Papers 2001, Instituto de Políticas y Bienes Públicos (IPP), CSIC.
    22. Graham Loomes & Ganna Pogrebna, 2017. "Do Preference Reversals Disappear When We Allow for Probabilistic Choice?," Management Science, INFORMS, vol. 63(1), pages 166-184, January.

    More about this item

    Keywords

    Decision under risk; Expected utility theory; Irrelevant alternative; Lottery choice;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:115:y:2012:i:3:p:435-437. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.