Determinants of the context dependency of choices

Abstract

One of the most fundamental assumptions of axiomatic economic decision-making theories is the notion of independence, according to which individuals evaluate choice options in isolation of each other. In other words, the presence of one option should not affect the value of other options. Decades of research accumulated a whole body of evidence that this assumption is systematically violated, resulting in so-called context effects. A triad comprising the similarity, attraction, and compromise effect has attracted the most interest so far, became a benchmark for multi-alternative decision-making models, and has been regarded as fundamental to decision making. Nevertheless, these context effects' universality has been challenged by identifying various boundary conditions, for example, desirability of the choice set. However, one important moderator variable that has not been systematically explored so far is presentation format. This is particularly important in light of recent observations that presentation format can have a substantial influence on decision making. For example, elicited risk attitudes change substantially when decisions are based on experiences and not on descriptions. In my dissertation, I aim to systematically explore how presentation format moderates context effects and which cognitive mechanisms underlie this a change of behavior. In Spektor, Gluth, Fontanesi, and Rieskamp (2017), we used an experience-based paradigm to assess the occurrence of context effects in this setting and thereby test a novel learning model. This model assumes that salient outcomes receive more attention and are thus perceived as more attractive. In line with our model's predictions, we observed the similarity effect and reversals of the compromise and attraction effects. Another recent promising advance is the use of perceptual decision-making tasks as proxies for preferential choice. In Spektor, Kellen, and Hotaling (2017), we adapted one such popular task, the rectangle-size task, to investigate the boundary conditions of the attraction effect and the existence of repulsion effects. We observed that the arrangement of stimuli on-screen had a substantially stronger influence on choices than stimulus design. Using a somewhat similar approach, in Gluth, Spektor, and Rieskamp (2017), we used a preferential task with perceptually coded features to investigate an apparent inconsistency regarding the influence of a third option's value on relative choice accuracy between the other two options. We found that the third option's value did not have this influence. However, without time pressure, we observed classical context effects that disappeared under time pressure. We found that value-based attentional capture provided a coherent account of the data in the experiments. I conclude that context effects of preferential choice are highly dependent on the presentation format and argue that attention plays a crucial role for this dependency. Future research should investigate such an attentional explanation of the presentation-format dependency of context effects.