Proportion Dominance: The Generality and Variability of Favoring Relative Savings Over Absolute Savings

20 Pages Posted: 4 Oct 2011  

Daniel M. Bartels

University of Chicago - Booth School of Business

Date Written: 2006

Abstract

Four studies probe Ps' sensitivity to absolute and relative savings. In three studies, Ps read scenarios forcing a tradeoff of saving more lives (230 vs. 225) vs. saving a larger proportion of a population (225 ‚ 230 = 75% vs. 230 ‚ 920 = 25%). Ps' preferences were driven by both absolute and relative savings. Maximizing relative savings, called ‘‘proportion dominance’’ (PD), at the expense of absolute savings is non-normative, and most participants concur with this argument upon reflection (Studies 2 and 3). PD is related to individual differences, such that people scored as ‘‘rational’’ thinkers exhibited less PD than people scored as ‘‘experiential’’ thinkers (Studies 1 and 3). Finally, a fourth study extends these results, finding proportion dominance in other domains using a different paradigm. These four studies demonstrate both the generality (across domains and paradigms) and the variability (inter- and intraindividual) of proportion dominance.

Keywords: Decision making, Choice, Preference, Value of life, Proportion dominance, Individual differences, Evaluability, Risk perception

Suggested Citation

Bartels, Daniel M., Proportion Dominance: The Generality and Variability of Favoring Relative Savings Over Absolute Savings (2006). Organizational Behavior and Human Decision Processes, Vol. 100, pp. 76-95, 2006. Available at SSRN: https://ssrn.com/abstract=1938519

Daniel M. Bartels (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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