Does choice change preferences? An incentivized test of the mere choice effect

Abstract

Widespread evidence from psychology and neuroscience documents that previous choices unconditionally increase the later desirability of chosen objects, even if those choices were uninformative. This is problematic for economists who use choice data to estimate latent preferences, demand functions, and social welfare. The evidence on this mere choice effect, however, exhibits serious shortcomings which prevent evaluating its possible relevance for economics. In this paper, we present a novel, parsimonious experimental design to test for the economic validity of the mere choice effect addressing these shortcomings. Our design uses well-defined, monetary lotteries, all decisions are incentivized, and we effectively randomize participants’ initial choices without relying on deception. Results from a large, pre-registered online experiment find no support for the mere choice effect. Our results challenge conventional wisdom outside economics. The mere choice effect does not seem to be a concern for economics, at least in the domain of decision making under risk.

Outcome context-dependence is not WEIRD: Comparing reinforcement- and description-based economic preferences worldwide

“…In order to discard that the differences found in scaling between phases could be confounded by differences in task performance (i.e., lack of learning, inattention), we reanalysed and refitted the data after excluding all participants who had less than 100% accuracy in choices involving fully-dominated options in the Lottery task (as seen in previous studies on economic preferences 47,48 ). In such contexts (i.e.…”

Changes in preferences reported after choices are informative, not merely statistical artifacts.

“…It seems unreasonable to expect participants to systematically adjust their estimations of options whose values are objectively defined. Furthermore, choices where option attributes are objectively defined (such as probability and monetary amount in risky choice studies or time in temporal discounting studies) will not likely produce an observable effect (Alós-Ferrer & Granic, 2021). We also believe that the evaluations should be malleable, in the sense that participants will have some degree of uncertainty about the estimations they provide.…”