IDEAS home Printed from https://ideas.repec.org/a/oup/jconrs/v21y1995i4p627-33.html
   My bibliography  Save this article

A Rational Reconstruction of the Compromise Effect: Using Market Data to Infer Utilities

Author

Listed:
  • Wernerfelt, Birger

Abstract

This article explores the possibility that consumers use market data to make inferences about product utilities. The argument is made by means of an example based on the "compromise effect" found in extant experimental data. This phenomenon is generally looked at as a manifestation of deviations from rationality in choice. However, assuming full rationality, I describe a decision rule that is based on consumers' inferences about their information about their own relative tastes. Through a number of examples, I will argue that consumers often use this or similar decision rules to make inferences about utility. I then show that the decision rule may generate compromise effects in experiments and that it may be sustainable. The compromise effect could therefore be seen as preliminary evidence that consumers make such inferences. Copyright 1995 by the University of Chicago.

Suggested Citation

  • Wernerfelt, Birger, 1995. "A Rational Reconstruction of the Compromise Effect: Using Market Data to Infer Utilities," Journal of Consumer Research, Oxford University Press, vol. 21(4), pages 627-633, March.
  • Handle: RePEc:oup:jconrs:v:21:y:1995:i:4:p:627-33
    DOI: 10.1086/209423
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/209423
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jconrs:v:21:y:1995:i:4:p:627-33. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) The email address of this maintainer does not seem to be valid anymore. Please ask Oxford University Press to update the entry or send us the correct email address. General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.