IDEAS home Printed from https://ideas.repec.org/a/uwp/landec/v84y2008i1p115-127.html
   My bibliography  Save this article

Decoy Effects in Choice Experiments and Contingent Valuation: Asymmetric Dominance

Author

Listed:
  • Ian J. Bateman
  • Alistair Munro
  • Gregory L. Poe

Abstract

While a dominated choice involves a situation in which one option clearly dominates another on all relevant dimensions, an asymmetrically dominated choice typically arises where at least two options do not dominate each other and one (but not both) of those options does dominate a third option. We demonstrate that the introduction of such an asymmetrically dominated option can have a significant impact upon choices between non-dominated options within the same choice set for non-market goods. Furthermore, we show that this effect can then translate into significant impacts upon subsequent valuations for those non-dominated options.

Suggested Citation

  • Ian J. Bateman & Alistair Munro & Gregory L. Poe, 2008. "Decoy Effects in Choice Experiments and Contingent Valuation: Asymmetric Dominance," Land Economics, University of Wisconsin Press, vol. 84(1), pages 115-127.
    • Handle: RePEc:uwp:landec:v:84:y:2008:i:1:p:115-127
    as

    Download full text from publisher

    File URL: http://le.uwpress.org/cgi/reprint/84/1/115
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Simonson, Itamar, 1989. "Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 158-174, September.
    2. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    3. Heberlein, Thomas A. & Wilson, Matthew A. & Bishop, Richard C. & Schaeffer, Nora Cate, 2005. "Rethinking the scope test as a criterion for validity in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 1-22, July.
    4. Anthony Burton & Katherine Carson & Susan Chilton & W. Hutchinson, 2007. "Resolving questions about bias in real and hypothetical referenda," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(4), pages 513-525, December.
    5. Cameron, Trudy Ann & Poe, Gregory L. & Ethier, Robert G. & Schulze, William D., 2002. "Alternative Non-market Value-Elicitation Methods: Are the Underlying Preferences the Same?," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 391-425, November.
    6. Bateman, Ian J, et al, 1997. "Does Part-Whole Bias Exist? An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 107(441), pages 322-332, March.
    7. Ratneshwar, Srinivasan & Shocker, Allan D & Stewart, David W, 1987. "Toward Understanding the Attraction Effect: The Implications of Product Stimulus Meaningfulness and Familiarity," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(4), pages 520-533, March.
    8. 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.
    9. Cummings, Ronald G & Elliott, Steven & Harrison, Glenn W & Murphy, James, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-621, June.
    10. Highhouse, Scott, 1996. "Context-Dependent Selection: The Effects of Decoy and Phantom Job Candidates," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(1), pages 68-76, January.
    11. John Loomis & Thomas Brown & Beatrice Lucero & George Peterson, 1997. "Evaluating the Validity of the Dichotomous Choice Question Format in Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(2), pages 109-123, September.
    12. Huber, Joel & Puto, Christopher, 1983. "Market Boundaries and Product Choice: Illustrating Attraction and Substitution Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(1), pages 31-44, June.
    13. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    14. Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fabio Galeotti & Maria Montero & Anders Poulsen, 2022. "The Attraction and Compromise Effects in Bargaining: Experimental Evidence," Management Science, INFORMS, vol. 68(4), pages 2987-3007, April.
    2. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2011. "Theory of Product Differentiation in the presence of the Attraction Effect," Working Papers 2011-3, Princeton University. Economics Department..
    3. Benjamin Ho & John Taber & Gregory Poe & Antonio Bento, 2016. "The Effects of Moral Licensing and Moral Cleansing in Contingent Valuation and Laboratory Experiments on the Demand to Reduce Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(2), pages 317-340, June.
    4. Sürücü, Oktay & Djawadi, Behnud Mir & Recker, Sonja, 2019. "The asymmetric dominance effect: Reexamination and extension in risky choice – An experimental study," Journal of Economic Psychology, Elsevier, vol. 73(C), pages 102-122.
    5. Radka Kubalová & Martin Klepek, 2022. "Brand Presence in Decision-Making Involving Decoys," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 34(1), pages 9-24.
    6. Day, Brett & Bateman, Ian J. & Carson, Richard T. & Dupont, Diane & Louviere, Jordan J. & Morimoto, Sanae & Scarpa, Riccardo & Wang, Paul, 2012. "Ordering effects and choice set awareness in repeat-response stated preference studies," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 73-91.
    7. Yuin Jeong & Sangheon Oh & Younah Kang & Sung-Hee Kim, 2021. "Impacts of Visualizations on Decoy Effects," IJERPH, MDPI, vol. 18(23), pages 1-19, December.
    8. Lim, Seul-Ye & Kim, Hyo-Jin & Yoo, Seung-Hoon, 2018. "Household willingness to pay for expanding fuel cell power generation in Korea: A view from CO2 emissions reduction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 242-249.
    9. Ho-Young Kim & So-Yeon Park & Seung-Hoon Yoo, 2016. "Public Acceptability of Introducing a Biogas Mandate in Korea: A Contingent Valuation Study," Sustainability, MDPI, vol. 8(11), pages 1-16, October.
    10. Robert J. Johnston & Randall S. Rosenberger, 2010. "Methods, Trends And Controversies In Contemporary Benefit Transfer," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 479-510, July.
    11. Sürücü, Oktay & Brangewitz, Sonja & Mir Djawadi, Behnud, 2017. "Asymmetric dominance effect with multiple decoys for low- and high-variance lotteries," Center for Mathematical Economics Working Papers 574, Center for Mathematical Economics, Bielefeld University.
    12. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    13. Li, Shengwu & Yu, Ning Neil, 2018. "Context-dependent choice as explained by foraging theory," Journal of Economic Theory, Elsevier, vol. 175(C), pages 159-177.
    14. Castillo, Geoffrey, 2020. "The attraction effect and its explanations," Games and Economic Behavior, Elsevier, vol. 119(C), pages 123-147.
    15. Randall S. Rosenberger & Robert J. Johnston, 2009. "Selection Effects in Meta-Analysis and Benefit Transfer: Avoiding Unintended Consequences," Land Economics, University of Wisconsin Press, vol. 85(3), pages 410-428.
    16. Morse-Jones, Sian & Bateman, Ian J. & Kontoleon, Andreas & Ferrini, Silvia & Burgess, Neil D. & Turner, R. Kerry, 2012. "Stated preferences for tropical wildlife conservation amongst distant beneficiaries: Charisma, endemism, scope and substitution effects," Ecological Economics, Elsevier, vol. 78(C), pages 9-18.
    17. Martínez-Espiñeira, Roberto & Lyssenko, Nikita, 2011. "Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation," Ecological Economics, Elsevier, vol. 70(8), pages 1435-1439, June.
    18. Maltz, Amnon & Rachmilevitch, Shiran, 2021. "A model of menu-dependent evaluations and comparison-aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    19. Andrew Balmford & Brendan Fisher & Rhys Green & Robin Naidoo & Bernardo Strassburg & R. Kerry Turner & Ana Rodrigues, 2011. "Bringing Ecosystem Services into the Real World: An Operational Framework for Assessing the Economic Consequences of Losing Wild Nature," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 161-175, February.
    20. Katherine Silz Carson & Susan M. Chilton & W. George Hutchinson & Riccardo Scarpa, 2020. "Public resource allocation, strategic behavior, and status quo bias in choice experiments," Public Choice, Springer, vol. 185(1), pages 1-19, October.
    21. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2015. "Revealed (P)Reference Theory," American Economic Review, American Economic Association, vol. 105(1), pages 299-321, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J-J Huang, 2009. "Revised behavioural models for riskless consumer choice," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(9), pages 1237-1243, September.
    2. Kaisa Herne, 1999. "The Effects of Decoy Gambles on Individual Choice," Experimental Economics, Springer;Economic Science Association, vol. 2(1), pages 31-40, August.
    3. Herne, Kaisa, 1997. "Decoy alternatives in policy choices: Asymmetric domination and compromise effects," European Journal of Political Economy, Elsevier, vol. 13(3), pages 575-589, September.
    4. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    5. repec:cup:judgdm:v:8:y:2013:i:2:p:136-149 is not listed on IDEAS
    6. Seidl, C. & Traub, S., 1996. "Rational Choice and the Relevance of Irrelevant Alternatives," Other publications TiSEM 26452450-9ecd-45b4-bc45-b, Tilburg University, School of Economics and Management.
    7. Fabio Galeotti & Maria Montero & Anders Poulsen, 2022. "The Attraction and Compromise Effects in Bargaining: Experimental Evidence," Management Science, INFORMS, vol. 68(4), pages 2987-3007, April.
    8. Cheng, Yin-Hui & Chuang, Shih-Chieh & Pei-I Yu, Annie & Lai, Wan-Ting, 2019. "Change in your wallet, change your choice: The effect of the change-matching heuristic on choice," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 67-76.
    9. Chunhua Wu & Koray Cosguner, 2020. "Profiting from the Decoy Effect: A Case Study of an Online Diamond Retailer," Marketing Science, INFORMS, vol. 39(5), pages 974-995, September.
    10. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    11. Guevara, C. Angelo & Fukushi, Mitsuyoshi, 2016. "Modeling the decoy effect with context-RUM Models: Diagrammatic analysis and empirical evidence from route choice SP and mode choice RP case studies," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 318-337.
    12. Jih-Jeng Huang, 2012. "Further explanations for context effects: a perspective of ideal and reference points," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(1), pages 281-290, January.
    13. repec:cup:judgdm:v:11:y:2016:i:3:p:213-222 is not listed on IDEAS
    14. Francisca Sinn & Sandra Milberg & Leonardo Epstein & Ronald Goodstein, 2007. "Compromising the compromise effect: Brands matter," Marketing Letters, Springer, vol. 18(4), pages 223-236, December.
    15. Diels, Jana Luisa & Wiebach, Nicole & Hildebrandt, Lutz, 2013. "The impact of promotions on consumer choices and preferences in out-of-stock situations," Journal of Retailing and Consumer Services, Elsevier, vol. 20(6), pages 587-598.
    16. Jörg Rieskamp & Jerome R. Busemeyer & Barbara A. Mellers, 2006. "Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 631-661, September.
    17. Mehran Spitmaan & Oihane Horno & Emily Chu & Alireza Soltani, 2019. "Combinations of low-level and high-level neural processes account for distinct patterns of context-dependent choice," PLOS Computational Biology, Public Library of Science, vol. 15(10), pages 1-31, October.
    18. Gomez, Yolanda & Martínez-Molés, Víctor & Urbano, Amparo & Vila, Jose, 2016. "The attraction effect in mid-involvement categories: An experimental economics approach," Journal of Business Research, Elsevier, vol. 69(11), pages 5082-5088.
    19. Nicole Wiebach & Jana L. Diels, 2011. "The impact of context and promotion on consumer responses and preferences in out-of-stock situations," SFB 649 Discussion Papers SFB649DP2011-050, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    20. Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
    21. Alexia Gaudeul & Paolo Crosetto, 2019. "Fast then slow: A choice process explanation for the attraction effect," Working Papers hal-02408719, HAL.
    22. Terry Connolly & Jochen Reb & Edgar E. Kausel, 2013. "Regret salience and accountability in the decoy effect," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(2), pages 136-149, March.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    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:uwp:landec:v:84:y:2008:i:1:p:115-127. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://le.uwpress.org/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.