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The attraction effect and its explanations

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  • Castillo, Geoffrey

Abstract

The attraction effect violates choice consistency, one of the central assumptions of economics. I present a risky choice experiment to test it and disentangle some of its explanations. I find the attraction effect, but in a smaller magnitude than previously thought. I uncover a ‘range effect’ that shows that people weight more attributes whose range increases. I also show that the aggregate results hide considerable heterogeneity between subjects.

Suggested Citation

  • Castillo, Geoffrey, 2020. "The attraction effect and its explanations," Games and Economic Behavior, Elsevier, vol. 119(C), pages 123-147.
    • Handle: RePEc:eee:gamebe:v:119:y:2020:i:c:p:123-147
    DOI: 10.1016/j.geb.2019.10.012
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    Cited by:

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    2. Fabian Herweg & Svenja Hippel & Daniel Müller & Fabio Römeis, 2024. "Axiom Preferences and Choice Mistakes under Risk," ECONtribute Discussion Papers Series 326, University of Bonn and University of Cologne, Germany.
    3. Ismaël Rafaï & Sébastien Duchêne & Eric Guerci & Irina Basieva & Andrei Khrennikov, 2022. "The triple-store experiment: a first simultaneous test of classical and quantum probabilities in choice over menus," Theory and Decision, Springer, vol. 92(2), pages 387-406, March.
    4. Landry, Peter & Webb, Ryan, 2021. "Pairwise normalization: A neuroeconomic theory of multi-attribute choice," Journal of Economic Theory, Elsevier, vol. 193(C).
    5. Cathleen Johnson & Aurélien Baillon & Han Bleichrodt & Zhihua Li & Dennie Dolder & Peter P. Wakker, 2021. "Prince: An improved method for measuring incentivized preferences," Journal of Risk and Uncertainty, Springer, vol. 62(1), pages 1-28, February.
    6. Fabian Herweg & Svenja Hippel & Daniel Müller & Fabio Römeis, 2024. "Axiom Preferences and Choice Mistakes under Risk," CESifo Working Paper Series 11166, CESifo.
    7. Kremena Valkanova, 2024. "Markov Stochastic Choice," Papers 2410.22001, arXiv.org.
    8. Zhuo Chen & Russell Golman & Jason Somerville, 2024. "Menu-dependent risk attitudes: Theory and evidence," Journal of Risk and Uncertainty, Springer, vol. 68(1), pages 77-105, February.
    9. Miguel Costa-Gomes & Georgios Gerasimou, 2020. "Status Quo Bias and the Decoy Effect: A Comparative Analysis in Choice under Risk," Papers 2006.14868, arXiv.org, revised Nov 2021.
    10. Liz Izakson & Yoav Zeevi & Dino J Levy, 2020. "Attraction to similar options: The Gestalt law of proximity is related to the attraction effect," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-21, October.

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    More about this item

    Keywords

    Attraction effect; Asymmetric dominance effect; Decoy effect; Range effect; Risky choice; Individual decision-making;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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