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Research Institute of Industrial Economics (IFN) Working Paper Series

No 1145:
Differences Attract: An Experimental Study of Focusing in Economic Choice

Ola Andersson (), Jim Ingebretsen Carlson () and Erik Wengström ()

Abstract: Several recent behavioral models of choice build on the idea that decision makers put more weight on attributes in which the available options differ more. We test this assumption in a controlled experiment where such biases will generate choice inconsistencies. As hypothesized, we find that subjects make more inconsistent choices when we add new options that affect the maximal difference in attributes among the options. Our findings suggest that the decision maker's focus is drawn to attributes that stand out. We also test the focusing effect against theories of decoy effects (asymmetric dominance), but we find that the focus effect dominates.

Keywords: Individual decision making; Focus; Attention; Salience; Decoy; Experiments; (follow links to similar papers)

JEL-Codes: C91; D03; D12; (follow links to similar papers)

84 pages, December 14, 2016

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