Deciding Without Resources: Psychological Depletion and Choice in Context

Abstract:     
Consumer choices are a result of an interplay of two systems: fast and intuitive thinking (System 1) and more deliberative reasoning (System 2). The present research examines the implication of the interplay between the two systems for context effects in choice by exploring the consequences of resource depletion. Building on a substantial body of psychological literature that points to one underlying resource used in self-regulation and decision-making, this paper demonstrates that resource depletion has a systematic influence on choices. Specifically, we demonstrate that resource depletion enhances the role of intuitive System 1 influences by impairing the effortful and deliberate overriding role of System 2. In five experiments, we find that resource depletion increases the share of reference-dependent choices, decreases the compromise effect, magnifies the attraction effect, and increases choice deferral. The results shed light on both the mechanism underlying context effects on choices and the scope of the depleted resource.

Keywords: Decision making, context effects, two systems, depletion

JEL Classifications: C91, M3, M31

Working Paper Series