Effect Propensity: The Distribution of Switchers' Choices in the Reference State as a Determinant of the Direction of Effects on Choice
Stanford GSB Working Paper No. 1788
53 Pages Posted: 12 Jun 2020
Date Written: October 2003
In a choice between two options, decision makers can often be divided into three segments: those who strongly prefer the first option, those who strongly prefer the second option, and those who might choose either option depending on the particular conditions ("Switchers"). In any reference state, such as the experimental control, most Switchers are likely to favor one of the two options. Thus, the limited growth potential of the option favored by Switchers in the reference state creates "effect propensity" in the opposite direction, whereby any condition or manipulation applied to the reference state is more likely to increase the share of the other option. We test this proposition in a series of studies in the context of choices between safe and risky options and between lower-price/quality and higher-price/quality options. The results indicate that a large majority of conceptually unrelated manipulations tend to increase the choice share of risky and higher-price/quality options. This effect propensity can be reversed when the risky and higher-price/quality options are the status quo alternatives or asymmetrically dominating in the reference state. Alternative explanations for effect propensity are examined. We discuss the implications of effect propensity for the interpretation of research findings, the selection of controls, and theory tests.
Keywords: choice, decision making, direction of effects, control
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Alternative Models for Capturing the Compromise Effect
By Ran Kivetz, Oded Netzer, ...
Extremeness Aversion and Attribute-Balance Effects in Choice
Unobserved Heterogeneity as an Alternative Explanation for 'Reversal' Effects in Behavioral Research
By J. Wesley Hutchinson, Wagner A. Kamakura, ...
Visual Representation: Implications for Decision Making
By Nicholas H. Lurie and Charlotte Mason
Context Effects Without a Context: Attribute Balance as a Reason for Choice
Goal Orientation and Consumer Preference for the Status Quo
Goal-Attribute Compatibility in Consumer Choice
Cartoon Graphics in the Communication of Accounting Information
By Malcolm Smith, Richard Taffler, ...
Predicting Choice Shares Under Conditions of Brand Interdependence
Perceptual Focus Effects in Choice
By Alexander Chernev, Jiewen Hong, ...