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A Dual Process Evaluability Framework for decision anomalies

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  • Schneider, Mark
  • Coulter, Robin A.

Abstract

Alternative explanations have been offered to explain consumers’ inconsistent preferences in decision problems. We present a Dual Process Evaluability Framework (DPEF) which suggests that the characteristics of the decision problem, including response mode, presentation mode, and choice-set structure, are critical to predicting preference reversals related to decisions under risk and uncertainty, over time, and between product assortments, as well as presentation mode reversals involving joint versus separate evaluations, and response mode reversals involving a combination of choice tasks, monetary value tasks, and attractiveness ratings. Our framework, grounded in evaluability theory and dual process models, predicts how these decision problem characteristics directly affect the ease of evaluation of alternatives which subsequently affects the relative dominance of feeling versus calculation in these tasks. Application of DPEF to previously documented preference reversals, complemented by three studies which test new predictions of DPEF, reveals that DPEF provides a parsimonious explanation for a variety of decision anomalies.

Suggested Citation

  • Schneider, Mark & Coulter, Robin A., 2015. "A Dual Process Evaluability Framework for decision anomalies," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 183-198.
    • Handle: RePEc:eee:joepsy:v:51:y:2015:i:c:p:183-198
    DOI: 10.1016/j.joep.2015.09.005
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    Cited by:

    1. Mark Schneider & Mikhael Shor, 2016. "The Common Ratio Effect in Choice, Pricing, and Happiness Tasks," Working papers 2016-29, University of Connecticut, Department of Economics.
    2. Tan, Huimin & Lv, Xingyang & Liu, Xiaoyan & Gursoy, Dogan, 2018. "Evaluation nudge: Effect of evaluation mode of online customer reviews on consumers’ preferences," Tourism Management, Elsevier, vol. 65(C), pages 29-40.
    3. Richards, Daniel W. & Fenton-O'Creevy, Mark & Rutterford, Janette & Kodwani, Devendra G., 2018. "Is the disposition effect related to investors’ reliance on System 1 and System 2 processes or their strategy of emotion regulation?," Journal of Economic Psychology, Elsevier, vol. 66(C), pages 79-92.
    4. Mark Schneider, 2016. "Dual Process Utility Theory: A Model of Decisions Under Risk and Over Time," Working Papers 16-23, Chapman University, Economic Science Institute.

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    More about this item

    Keywords

    Preference reversals; Decision anomalies; Evaluability theory; Dual process models;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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