HOW VARIETY ALTERS EXPERIENCE BY INFLUENCING BOTH CHOICE AND HEDONIC VALUE

This paper makes a conceptual distinction between the effects of variety on choice and its effects on the hedonic value of chosen alternatives, to help explain consumers ’ persistent and seemingly perverse tendency to choose less-preferred items from a varied set. In particular, we show that although high-variety sets have an unfavorable effect on choice (in the sense that worse items are chosen), an item chosen from a large set is preferred to that same item chosen from a smaller set. Revisiting data previously analyzed in Ratner, Kahn, and Kahneman (1999, Experiment 5), using a model of the Heckman type (Heckman 1979), we find substantially stronger effects of variety on hedonic value than in the earlier analysis. Our re-analysis does not contradict RKK’s earlier findings of a retrospective bias towards varied sequences, but suggests a specific mechanism that may underlie them: memory may favor varied sequences if it is driven by actual consumption experience, rather than choice context. A VARIETY OF EFFECTS