Saturday, October 16, 2010

Context

Would you rather have $6 or a pen worth $6?
Would you rather have $6, a pen worth $6, or a pen worth 25 cents?


Most people wouldn't chose the cheaper pen, but research has shown that simply having it as an option increases the number of people who would choose the nicer pen. One study told participants that some of them would be rewarded for participating. They were asked to choose which option they would rather have. The first set were asked to choose between the money and the $6 pen. The other half were asked to choose between the money, the $6 pen, and the cheap pen. 


In the first group, 64% chose the money and 36% chose the pen. In the second set, 52% chose the money, 46% chose the expensive pen, and 2% chose the cheap pen.


Simply having an inferior option to compare the pen to caused more people to choose that option. 


This also happens with cars. Manufacturers often have a base model with few features, a model with more features, and the "loaded" model. Customers are more likely to choose the middle option. 


Simonson, Itamar, and Amos Tversky. "Choice in Context: Tradeoff Contrast and Extremeness Aversion." Journal of Marketing Research. 29.3 (1992): 281-295. Print.

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