Thinking and Deciding

EFFECTS OF THE OPTIONS AVAILABLE ON CHOICE 295
Effects of the options available on choice
The last section described a discrepancy between choice and matching. Other nonnormative
effects are found in choices alone. Choices typically involve tradeoffs of
two or more attributes. In a tradeoff, one option is better on one attribute and another
is better on another attribute. If this kind of tradeoff were not involved, the
choice would be easy, a “no brainer.” Because tradeoffs are difficult, people often
use simplifying heuristics. Sometimes these heuristics shown themselves in the form
of inconsistencies that depend on which alternatives are available.
Asymmetric dominance
Suppose that there are only two brands of beer. Brand X sells for $1.80 per six-pack
and has a “quality rating” of 50, on a scale of 0 to 100; brand Y sells for $2.60 and
has a rating of 70. Some beer drinkers will prefer X, others Y. Now suppose we
introduce brand Z into the market, with a rating of 50 and a price of $2.00, as shown
in the figure below. Brand Z will not get much market share. It is dominated by X;
that is, Z is no better than X on either dimension, price or quality, and X is better
than Z on one. No matter how people weigh the two dimensions, nobody has any
reason to choose Z. If everyone chose on the basis of the tradeoff between the two
dimensions, then the introduction of Z would not affect the proportion of people who
choose X and Y. That is, it would not affect the market share of these two.
$1.80
$2.60
X
Z
Y
50 70
Of course, I would not be telling this story if that always happened. Introduction
of Z increases the market share of X (Huber, Payne, and Puto, 1982). That is, when
neither of two options (X and Y) dominates the other, introduction of an option
that is asymmetrically dominated — dominated by one option but not the other —
increases the probability of choosing the option that dominates the new option. Why?
The best account we have of this phenomenon is that consumers who have trouble
deciding between X and Y now have an additional reason to choose X. Whatever
else can be said about X, it is clearly better than Z. Z serves as a reference point