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« The Role of Sample Size and Unobserved Heterogeneity in Causal Inference | Main | A Rash Of Senicide? »

31 January 2007

Making bad choices, again

Amy Perfors

Most of us are aware of various distortions in reasoning that people are vulnerable to, mainly because of heuristics we use to make decisions easier. I recently came across an article in Psychological Science called Choosing an inferior alternative that demonstrates a technique that will cause people to choose an alternative that they themselves have previously acknowledged to be personally inferior. This is interesting for two reasons: first of all, exactly how and why it works tells us something about the process by which our brains update (at least some sorts of) information; and second, because I anticipate commercials and politicians and master manipulaters to start using these techniques any day now, and maybe if we know about it in advance we'll be more resistant. One can hope, anyway.

So what's the idea?

It's been known for a while that decision makers tend to slightly bias their evaluations of new data to support whatever alternative is currently leading. For instance, if I'm trying to choose between alternatives A, B, and C -- let's say they are restaurants and I'm trying to decide where to go eat -- when I learn about one attribute, say price, I'll tentatively rank them and decide that (for now) A is the best option. If I then learn about another attribute, say variety, I'll rerank them, but not in the same way I would have if I'd seen those two attributes at the same time: I'll actually bias it somewhat so that the second attribute favors A more than it otherwise would have. This effect is generally only slight, so if restaurant B is much better on variety and only slightly worse on price, I'll still end up choosing restaurant B: but if A and B were objectively about equal, or B was even slightly better, then I might choose A anyway.

Well, you can see where this is going. These researchers presented subjects with a set of restaurants and attributes to determined their objective "favorite." Then, two weeks later, they brought the same subjects in again and presented them with the same restaurants. This time, though, they had determined -- individually, for each subject -- the proper order of attributes that would most favor choosing the inferior alternative. (It gets a little more complicated than this, because in order to try to ensure that the subjects didn't recognize their choice from before, they combined nine attributes into six, but that's the essential idea). Basically what they did is picked the attribute that most favored the inferior choice and put it first, hoping to establish that the inferior choice would get installed as the leader. The attribute that second-most favored the inferior choice was last, to take advantage of recency effects. The other attributes were presented in pairs, specifically chosen so that the ones that most favored the superior alternative were paired with neutral or less-favorable ones (thus hopefully "drowning them out.")

The results were that when presented with the information in this order, 61% of people chose the inferior alternative. The good news, I guess, is that it wasn't more than 61% -- some people were not fooled -- but it was robustly different than chance, and definitely more than you'd expect (since, after all, it was the inferior alternative, and one would hope you'd choose that less often). Moreover, people didn't realize they were doing this at all: they were more confident in their choice when they had picked the inferior alternative. Even when told about this effect and asked if they thought they themselves had done it, they tended not to think so (and the participants who did it most were no more likely to think they had done it than the ones who didn't).

I always get kind of depressed at this sort of result, mainly because I become convinced that this sort of knowledge is then used by unscrupulous people to manipulate others. I mean, it's probably always been used somewhat subconsciously that way, but making it explicit makes it potentially more powerful. On the plus side, it really does imply interesting things for how we process and update information -- and raises the question of why we bias the leading alternative, given that it's demonstrably vulnerable to order effects. Just to make ourselves feel better about our current choice? But why would this biasing do that - wouldn't we feel best of all if we knew we were being utterly rational the whole time? It's a puzzle.

Posted by Amy Perfors at January 31, 2007 10:29 AM

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