Observed Variability and Values Matter: Toward a Better Understanding of Information Search and Decisions from Experience

The search for different options before making a consequential choice is a central aspect of many important decisions, such as mate selection or purchasing a house. Despite its importance, surprisingly little is known about how search and choice are affected by the observed and objective properties of the decision problem. Here, we analyze the effects of two key properties in a binary choice task: the options ’ observed and objective values, and the variability of payoffs. First, in a large public data set of a binary choice task, we investigate how the observed value and variability relate to decision-makers ’ efforts and preferences during search. Furthermore, we test how these properties influence the chance of correctly identifying the objectively maximizing option, and how they affect choice. Second, we designed a novel experiment to systematically analyze the role of the objective difference between the options. We find that a larger objective difference between options increases the chance for correctly identifying the maximizing option, but it does not affect behavior during search and choice. Copyright © 2013 John Wiley & Sons, Ltd. key words decisions from experience; information search; bounded rationality; maximization; payoff variability; memory In many important real-life decisions, we seek out informa-tion about different possibilities before making a choice. For example, most people would not purchase a house with-out looking at several possibilities or marry a partner withou