Year: 2013
Type: article
Abstract: Humans exhibit certain systematic context-dependent preference reversals when choosing among options that vary along multiple attribute dimensions.For instance, the attraction, similarity, and compromise effects each involves a change in relative preference between two options when a third option is introduced.Previously, such effects have been attributed to irrationality or suboptimality in decision-making, or to specific architectural or dynamical constraints on cognition.We use a Bayesian model of multi-attribute choice to demonstrate that these effects naturally arise from three basic assumptions: (1) humans assess options relative to "fair market value" as inferred from prior experience and available options; (2) attributes are imperfectly substitutable, and scarce attributes are relatively more valuable; (3) uncertainty about market conditions and option values contributes to stochasticity in choice behavior.This work provides both a novel normative explanation for contextual modulation of choice behavior, and a means to predict choice as a function of past experiences and novel contexts.
Authors: Shenoy, Pradeep, Yu, Angela
Institutions: University of Washington, University of California San Diego
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2401300897