Influence of an Intermediate Option on the Description-Experience Gap and Information Search

Abstract

Research shows that people tend to overweight small probabilities in description and underweight them in experience, thereby leading to a different pattern of choices between description and experience; a phenomenon known as the Description-Experience (DE) gap. However, little is known on how the addition of an intermediate option and contextual framing influences the DE gap and people’s search strategies. This paper tests the effects of an intermediate option and contextual framing on the DE gap and people’s search strategies, where problems require search for information before a consequential choice. In the first experiment, 120 participants made choice decisions across investment problems that differed in the absence or presence of an intermediate option. Results showed that adding an intermediate option did not reduce the DE gap on the maximizing option across a majority of problems. There were a large majority of choices for the intermediate option. Furthermore, there was an increase in switching between options due to the presence of the intermediate option. In the second experiment, 160 participants made choice decisions in problems like those presented in experiment 1; however, problems lacked the investment framing. Results replicated findings from the first experiment and showed a similar DE gap on the maximizing option in a majority of problems in both the absence and presence of the intermediate option. Again, there were a large majority of choices for the intermediate option. Also, there was an increase in switching between options due to the presence of the intermediate option. Meta-analyses revealed that the absence or presence of the intermediate option created certain differences in the strength of frequency and recency processes. Also, a single natural-mean heuristic model was able to account for the experimental results across both experiments. We discuss implications of our findings to consequential decisions made after information search.

Life and Death Decisions and COVID‐19: Investigating and Modeling the Effect of Framing, Experience, and Context on Preference Reversals in the Asian Disease Problem

“…Perhaps, the COVID‐19 context and the prevailing pandemic and its losses made people risk seeking. In addition, this result is consistent with the prior research that reported context to influence decisions (Brunstein et al., 2010 ; Dutt & Gonzalez, 2012b ; Gigerenzer & Hug, 1992 ; Sharma et al., 2018 ; Tversky & Simonson, 1993 ; Wulff et al., 2015 ). However, this result contrasts with the findings of Bless et al.…”

“…It was observed that participants assigned to climate context were less responsive in graphically representing the inflow and outflow of CO 2 emissions compared to the participants who were given the marble context. Similarly, in a study on framing investment options, Sharma, Debnath, and Dutt ( 2018 ) found that a description‐experience gap was absent when the experiment was presented without investment framing. Furthermore, Wulff et al.…”

“…Although prior research has investigated the effect of different contexts on participant's performance (Dutt & Gonzalez, 2013 ), investment behavior (Sharma et al., 2018 ), and product rating on e‐commerce websites (Wulff et al., 2015 ), little is known about how general and specific contexts would affect the human preferences under risk under the combined influence of different problem frames and problem formats.…”

“…Results show that people are less responsive when presented with a general problem in making consequential decisions. However, when presented with a context‐based problem, people are more responsive in making consequential decisions (Brunstein, Gonzalez, & Kanter, 2010 ; Gigerenzer & Hug, 1992 ; Sharma et al., 2018 ; Tversky & Simonson, 1993 ; Wulff et al., 2015 ). This human behavior has been attributed to unfamiliarity with the situation (Ludvig, Sutton, & Kehoe, 2012 ; Tversky & Simonson, 1993 ; Wulff et al., 2015 ).…”

“…Although there has been work about the main effects of problem format and problem type; however, little is known about the joint effect of problem format and problem type on people's preferences. According to the literature on problem format, people underweight the probability of low‐frequency events in the experience format; whereas, people overweight the probability of low‐probability events in description format (Gonzalez & Dutt, 2011 ; Hau, Pleskac, Kiefer, & Hertwig, 2008 ; Hertwig, 2012 ; Hertwig & Erev, 2009 ; Hertwig et al., 2004 ; Sharma et al., 2018 ; Weber, Shafir, & Blais, 2004 ). Similarly, according to the literature on problem type, people tend to avoid risky options when the general problem is presented.…”