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Effects of Endogenous Task Complexity and the Endowed Bundle on Stated Choice

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  • Hu, Wuyang

Abstract

Conventionally, studies examining the impacts of choice complexity only consider complexity introduced exogenously from the tasks respondents face. In the context of a stated conjoint survey, this article establishes endogenous complexity measures through decision-makers�' experience known as the endowed bundle before the survey. Results show that complexity should not only be defined exogenously. Endogenous complexity measures are important in determining the utility associated with an alternative and the decision of whether to participate in the market. In addition, some of these complexity effects are nonlinear. We also show that exogenous complexity simultaneous affects the choice consistency.

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File URL: http://purl.umn.edu/21437
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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number 21437.

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Date of creation: 2006
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Handle: RePEc:ags:aaea06:21437

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Related research

Keywords: Complexity; Endowed Bundle; Random Utility; Stated Choice; Research Methods/ Statistical Methods; C81; D12;

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  1. Wuyang Hu, 2005. "Logit models: smallest versus largest extreme value error distributions," Applied Economics Letters, Taylor and Francis Journals, vol. 12(12), pages 741-744.
  2. Masatlioglu, Yusufcan & Ok, Efe A., 2005. "Rational choice with status quo bias," Journal of Economic Theory, Elsevier, vol. 121(1), pages 1-29, March.
  3. Peter Boxall & W. L. (Vic) Adamowicz & Amanda Moon, 2009. "Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 503-519, October.
  4. Swait, Joffre & Adamowicz, Wiktor, 2001. " The Influence of Task Complexity on Consumer Choice: A Latent Class Model of Decision Strategy Switching," Journal of Consumer Research, University of Chicago Press, vol. 28(1), pages 135-48, June.
  5. Conlon, B.J. & Dellaert, B.G.C. & Soest, A.H.O. van, 2001. "Complexity and Accuracy in Consumer Choice: The Double Benefits of Being the Consistently Better Brand," Discussion Paper 2001-54, Tilburg University, Center for Economic Research.
  6. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  7. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
  8. Munro, Alistair & Sugden, Robert, 2003. "On the theory of reference-dependent preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 407-428, April.
  9. Arentze, Theo & Borgers, Aloys & Timmermans, Harry & DelMistro, Romano, 2003. "Transport stated choice responses: effects of task complexity, presentation format and literacy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(3), pages 229-244, May.
  10. Wuyang Hu & Wiktor L. Adamowicz & Michele M. Veeman, 2006. "Labeling Context and Reference Point Effects in Models of Food Attribute Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1034-1049.
  11. Mary E. Huneke & Catherine Cole & Irwin P. Levin, 2004. "How Varying Levels of Knowledge and Motivation Affect Search and Confidence during Consideration and Choice," Marketing Letters, Springer, vol. 15(2_3), pages 67-79, 07.
  12. Dhar, Ravi, 1997. " Consumer Preference for a No-Choice Option," Journal of Consumer Research, University of Chicago Press, vol. 24(2), pages 215-31, September.
  13. Eric J. Johnson & John W. Payne, 1985. "Effort and Accuracy in Choice," Management Science, INFORMS, vol. 31(4), pages 395-414, April.
  14. David Hensher & John Rose & William Greene, 2005. "The implications on willingness to pay of respondents ignoring specific attributes," Transportation, Springer, vol. 32(3), pages 203-222, 05.
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