Does inducing choice procedures make individuals better off? An experimental study

Abstract

Over the years the psychological and economic literature on multi-attribute individual decision-making has focused its attention on examining what class of heuristics better describes subjects' behaviour. In contrast, motivated by the proliferation of online choice platforms, we investigate whether inducing subjects to use holistic vs. characteristic-based search (CBS) procedures has an effect on the quality of their decision by proposing a between-subject experiment involving an innovative visual choice task. We find that encouraging subjects to use CBS heuristics as opposed to holistic ones makes them better off. We also examine how subjects' performance is related with complexity, time pressure, and random choice by running simulations and link our results to the related literature.We would like to thank Marco Tecilla for excellent computer programming. We are extremely grateful to an anonymous referee for her/his support to our paper, the many insightful comments, and the valuable suggestions on the research program. We also thank Miguel Costa-Gomes, Paola Manzini, Ariel Rubinstein, the participants to the 2016 International Meeting on Experimental and Behavioral Social Sciences (Rome), the seminar audiences at the universities of Aberdeen, St Andrews and Trento and the editor of this journal. Financial support from the University of Trento's core funding is gratefully acknowledged. Any error is our own responsibility. Electronic supplementary material The online version of this article