5. Hsee et al. (1999): Preference reversals between joint and separate evaluations of options: a review and theoretical analysis

Question 1

Evaluation scale =

Answer 1

the nature of the response participants are asked to make

Question 2

Evaluation mode =

Answer 2

joint versus separate evaluations

Question 3

separate evaluation mode

Answer 3

(seeing only one option)

Question 4

joint evaluation mode

Answer 4

(seeing two options)

Question 5

RQ:

Answer 5

what is the effect of a certain evaluation mode on the willingness to pay for salary

Question 6

how was this tested?

Answer 6

willingness to pay for salary for each job candidate:
candidate J: has written 70 KY programs in last 2 years (experience), GPA 3.0
candidate S: has written 10 KY programs in last 2 years, GPA 4.9

Question 7

results

Answer 7

preference reversal > in JE, WTP values were higher for J whereas in SE, WTP values were higher for S

Question 8

why

Answer 8

evaluability hypothesis: some attributes (such as GPA) are easy to evaluate independently, whereas other attributes (how many programs) are more difficult to evaluate

Question 9

separate evaluation

Answer 9

easy-to-evaluate attribution

Question 10

easy-to-evaluate attribution

Answer 10

difficult-to-evaluate attribute

Question 11

Evaluability information
no information:
when they know the neutral reference point:
when they know the best and worst possible values:

Answer 11

no information: extremely difficult to evaluate
when they know the neutral reference point: any value above this point is good, below is bad
when they know the best and worst possible values: relatively easy to evaluate

Question 12

Decoy effect

Answer 12

When a third options is added, preference of consumers might shift > Ariely, 2009
Because the third option is as expensive as the second one, we think this is a really good option

Question 13

decoy (attraction) effect and why

Answer 13

presence of an inferior option (‘bad choice’) in a choice set increases the probability of choosing a superior option
inferior option serves as an anchor and makes the other option to seem more attractive

Question 14

compromise effect =

Answer 14

the tendency to lean towards the middle option if options are hard to compare
the middle option serves as the ‘safest’ option as extremes are associated with risk

Question 15

Decoy effect - popcorn experiment

Answer 15

change in preferences between two options when also presented a third option
this is the option that nobody wants
first: small popcorn for $3 or large for $7
then: small popcorn for $3, medium for $6,50 or large for $7
why have this decoy option at all? because it shifts the attention toward the more expensive option and makes it more attractive