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The Effects of Decoy Gambles on Individual Choice

Published online by Cambridge University Press:  14 March 2025

Kaisa Herne
Kaisa Herne*
Affiliation:
University of Turku, Department of Political Science, FIN 20014 Turku, Finland
*
email: KHERNE@utu.fi
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Abstract

A number of studies demonstrate that individual choice can be influenced by alternatives which should be irrelevant according to standard choice theory. In these studies it has been observed that introducing a decoy option, which is either asymmetrically dominated by a target option or which makes the target a compromise, increases the likelihood of choosing the target. A common feature of earlier research on decoy effects is the use of hypothetical choice tasks. The aim of this paper is to investigate decoy effects in a properly controlled experiment where subjects are given real incentives. Here, monetary gambles are used as alternatives. The results demonstrate that decoy effects persist despite the use of real incentives.

Keywords

asymmetric domination effectcompromise effectdecoy effectsindividual decision making

JEL classification

D11: Consumer Economics: Theory

Information

Type
Research Article
Information
Experimental Economics , Volume 2 , Issue 1 , August 1999 , pp. 31 - 40
Copyright
Copyright © 1999 Economic Science Association

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