Lay rationalism and inconsistency between predicted experience and decision

Abstract

Decision-makers are sometimes depicted as impulsive and overly influenced by 'hot', affective factors. The present research suggests that decision-makers may be too 'cold' and overly focus on rationalistic attributes, such as economic values, quantitative specifications, and functions. In support of this proposition, we find a systematic inconsistency between predicted experience and decision. That is, people are more likely to favor a rationalistically-superior option when they make a decision than when they predict experience. We discuss how this work contributes to research on predicted and decision utilities; we also discuss when decision-makers overweight hot factors and when they overweight cold factors. Copyright # 2003 John Wiley & Sons, Ltd.key words rationale; rationalism; rule; decision utility; experienced utility; predicted utility; consumption experience; inconsistency; preference reversal Traditional decision theorists assume that when choosing between options that have the same costs, decisionmakers analyze which option will deliver the highest expected outcome utility and choose that option. This is a consequentialist utility analysis approach. In reality, people rarely base their decisions strictly on this approach. In recent years, behavioral decision theorists have proposed that choices are often driven by decisionmakers' affect toward the choice options (e.g. Frederick, 2002;Hsee & Rottenstreich, 2002;Kahneman, Schkade, & Sunstein, 1998;Loewenstein, 1996;Loewenstein et al., 2001;Rottenstreich & Hsee, 2001;Slovic et al., 2002), and that such affect-driven decisions often lead to different choices than the consequentialist utility analysis would prescribe. For example, when choosing between two equally expensive computers, one with a faster processor and the other having a more appealing color, decision-makers may focus more on the color of the computers than warranted by a careful consequentialist utility analysis. It appears that decisions are not 'cold' enough.

Decision and experience: why don't we choose what makes us happy?

“…Hsee and co-authors [58] referred to the layperson's desire for rationality as 'lay rationalism', and studied three specific manifestations. One is 'lay economism', the tendency to base decisions on financial aspects of the options and neglect experiential aspects.…”

“…For example, when choosing between two equally expensive audio systems, one with a higher wattage rating (a hard attribute) and the other with a richer sound (a soft attribute), most people chose the high-wattage model, even though when asked to predict their enjoyment, they favored the richer-sounding model. A third manifestation of lay rationalism is 'lay functionalism', a tendency to focus on the primary goal(s) of the decision and overlook other aspects that are important to overall experience [58].…”

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“…However, hedonic features are hard to justify rationally compared with utilitarian features (Diefenbach & Hassenzahl, 2009). Research has associated further hedonic attributes with waste, luxury, and guilt (Kivetz & Simonson, 2002;Hsee, Zhang, & Xi, 2003). Users wish to be seen as addressing points of pain before addressing their pleasure needs to avoid guilt (Berry, 1994) even though they may prefer the latter (Diefenbach & Hassenzahl, 2011).…”

The living donor study: the concepts and frames of living kidney donors

“…Hsee, et al (2003), also contend that living kidney donors may draw upon element of intense rational behaviour in that they are so focused on their primary goal of donation that they overlook other significant facets of the overall experience, like physical, psychological or familial risks. For one potential living kidney donor, she was so focussed on her desire to donate, that she disregarded the effect it was having on her family.…”

“…There are living kidney donor patients who may not only avoid uncomfortable rationalisations or uncertainties to their choices, but they also support a self-precipitated illusion and an opinion of self-infallibility that results in only partially assessing the likelihood of occurrences in the future (Hsee, Zhang, Yu and Yiheng, 2003). Hsee, et al (2003), also contend that living kidney donors may draw upon element of intense rational behaviour in that they are so focused on their primary goal of donation that they overlook other significant facets of the overall experience, like physical, psychological or familial risks.…”