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The attraction effect and its explanations

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  • Castillo, Geoffrey

Abstract

The attraction effect violates choice consistency, one of the central assumptions of economics. I present a risky choice experiment to test it and disentangle some of its explanations. I find the attraction effect, but in a smaller magnitude than previously thought. I uncover a ‘range effect’ that shows that people weight more attributes whose range increases. I also show that the aggregate results hide considerable heterogeneity between subjects.

Suggested Citation

  • Castillo, Geoffrey, 2020. "The attraction effect and its explanations," Games and Economic Behavior, Elsevier, vol. 119(C), pages 123-147.
  • Handle: RePEc:eee:gamebe:v:119:y:2020:i:c:p:123-147
    DOI: 10.1016/j.geb.2019.10.012
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    3. Cathleen Johnson & Aurélien Baillon & Han Bleichrodt & Zhihua Li & Dennie Dolder & Peter P. Wakker, 2021. "Prince: An improved method for measuring incentivized preferences," Journal of Risk and Uncertainty, Springer, vol. 62(1), pages 1-28, February.

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    More about this item

    Keywords

    Attraction effect; Asymmetric dominance effect; Decoy effect; Range effect; Risky choice; Individual decision-making;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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