Decoy Effects in a Consumer Search Task

Research by Huber, Payne, and Puto (1982) revealed that the addition of a third alternative to a choice set can lead to a redistribution of the choice probabilities for the two existing alternatives, such that one alternative that had not previously been preferred over the other becomes the favored alternative. The results of that study violated both the principles of regularity and similarity, and these findings have since been replicated in numerous studies. The present research was designed to address a potential limitation of these previous studies. Specifically, to the author\u27s knowledge, no study had yet examined the effect of introducing a decoy alternative to a choice set after the other alternatives have already been presented. This tendency to present all alternatives simultaneously may be a significant limitation for two reasons. First, there is an issue of ecological representativeness: In an actual shopper\u27s experience, all relevant products are not typically available concurrently. Second, studies of non-instrumental information search indicate that the relative weighting of information may depend on how and when the information was obtained with participants typically placing greater weight on the newly acquired information. Thus there are theoretical grounds to expect a decoy to have different effects on choice, depending on whether the decoy occurs concurrently with, or subsequent to, the other alternatives. In the work reported herein, the effect of inviting or directing participants to search for an asymmetrically dominated decoy alternative was examined to determine whether the act of searching for a third alternative influences participants\u27 preference for the available alternatives. In the present research, participants were more likely to select the asymmetrically dominated alternative when they had been given the option to search for that alternative than were participants who either had the same alternative shown to them immediately, or participants who were directed to search for the third alternative. In general, these findings replicated the results of previous studies, in that the addition of a third, inferior alternative to a choice set led to a significant preference for one alternative over the other. However, this same preference shift was not evident when participants sought out the inferior alternative, either voluntarily or when directed to do so