Attention, Information Processing and Choice in Incentive-Aligned Choice Experiments

A perennial problem in choice experiments is that consumers may not behave as they would in real life. Incentive alignment, whereby each decision is realized with some probability, is often seen as a solution to this problem. However, if processing information is costly, incentive-alignment should not be enough to motivate participants to process choice-relevant information as carefully as they would if the decision was to be realized with certainty. Moreover, the probability that a choice will be realized influences its psychological distance, which should have a systematic impact on the type of alternatives chosen by consumers. We empirically investigate how incentives impact attention, information processing, and choice. We vary the probability that the respondent’s choice will be realized from 0 (hypothetical) to 0.01, 0.50, 0.99, and 1 (deterministic). Based on response time and eye tracking data, we find a positive correlation between the probability that the choice will be realized and the level of attention. Respondents for whom choices are more likely to be realized also tend to choose more familiar products, and tend to be more price sensitive. The latter effect is driven by respondents who care more about the product category.