Scandinavian Working Papers in Economics
Working Papers,
Lund University, Department of Economics
No 2016:15: Differences Attract: An Experimental Study of Focusing in Economic Choice
Ola Andersson (), Jim Ingebretsen Carlson () and Erik Wengström ()
Additional contact information
Ola Andersson: Research Institute of Industrial Economics, Sweden
Jim Ingebretsen Carlson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Erik Wengström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Abstract: Several recent models of choice build on the idea that decision makers are more likely to choose an option if its attributes stand out compared to the attributes of the available alternatives. One example is the model of focusing by Köszegi and Szeidl (2013) where decision makers focus disproportionally on the attributes in which the available options differ more, implying that some attributes will be overweighted. We test this prediction in a controlled experiment. We find that subjects are more likely to make inconsistent choices when we manipulate the choice set by adding new options that are unchosen, but affect the maximal difference in attributes among the options. Hence, our results suggest that there exists a focusing effect.
Keywords: Individual decision making; focus; attention; salience; decoy; experiments
69 pages, June 30, 2016
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