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The Effects of Decoy Gambles on Individual Choice

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  • Kaisa Herne

Abstract

A number of studies demonstrate that individual choice can be influenced by alternatives which should be irrelevant according to standard choice theory. In these studies it has been observed that introducing a decoy option, which is either asymmetrically dominated by a target option or which makes the target a compromise, increases the likelihood of choosing the target. A common feature of earlier research on decoy effects is the use of hypothetical choice tasks. The aim of this paper is to investigate decoy effects in a properly controlled experiment where subjects are given real incentives. Here, monetary gambles are used as alternatives. The results demonstrate that decoy effects persist despite the use of real incentives. Copyright Kluwer Academic Publishers 1999

Suggested Citation

  • Kaisa Herne, 1999. "The Effects of Decoy Gambles on Individual Choice," Experimental Economics, Springer;Economic Science Association, vol. 2(1), pages 31-40, August.
    • Handle: RePEc:kap:expeco:v:2:y:1999:i:1:p:31-40
    DOI: 10.1023/A:1009925731240
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