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Two-stage decisions increase preference for hedonic options

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  • Bhargave, Rajesh
  • Chakravarti, Amitav
  • Guha, Abhijit

Abstract

When choosing from multiple options, decision-makers may directly choose an option (single-stage decision), or initially shortlist a subset of options, and then choose an option from this shortlist (two-stage decision). Past work suggests that these two decision formats should lead to the same final choice when information about the choice alternatives is held constant. In contrast, this research demonstrates a novel effect: two-stage decisions increase preference for hedonic (vs. utilitarian) options. A regulatory focus account explains this effect. In a two-stage process, after shortlisting, decision-makers feel that they have sufficiently advanced their prevention goals, and this reduces their prevention focus during the final choice stage. Reduced prevention focus, in turn, enhances hedonic preference. Four studies across different decision contexts illustrate this effect and support the underlying process mechanism. The findings suggest that the formal structure of a decision (single-stage vs. two-stage) leads to systematic differences in decision-makers’ choices.

Suggested Citation

  • Bhargave, Rajesh & Chakravarti, Amitav & Guha, Abhijit, 2015. "Two-stage decisions increase preference for hedonic options," LSE Research Online Documents on Economics 64119, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:64119
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    File URL: http://eprints.lse.ac.uk/64119/
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    References listed on IDEAS

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    More about this item

    Keywords

    Two-stage decisions; Hedonic choices; Utilitarian choices; Regulatory focus;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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