Information overload or search-amplified risk? Set size and order effects on decisions from experience

Abstract

How do changes in choice-set size influence information search and subsequent decisions? Moreover, does information overload influence information processing with larger choice sets? We investigated these questions by letting people freely explore sets of gambles before choosing one of them, with the choice sets either increasing or decreasing in number for each participant (from two to 32 gambles). Set size influenced information search, with participants taking more samples overall, but sampling a smaller proportion of gambles and taking fewer samples per gamble, when set sizes were larger. The order of choice sets also influenced search, with participants sampling from more gambles and taking more samples overall if they started with smaller as opposed to larger choice sets. Inconsistent with information overload, information processing appeared consistent across set sizes and choice order conditions, reliably favoring gambles with higher sample means. Despite the lack of evidence for information overload, changes in information search did lead to systematic changes in choice: People who started with smaller choice sets were more likely to choose gambles with the highest expected values, but only for small set sizes. For large set sizes, the increase in total samples increased the likelihood of encountering rare events at the same time that the reduction in samples per gamble amplified the effect of these rare events when they occurred-what we call search-amplified risk. This led to riskier choices for individuals whose choices most closely followed the sample mean.Keywords Information overload . Decisions from experience . Risk . Choice overload . Consumer behavior From what we wear to how we entertain ourselves, we are constantly choosing among sets of alternatives. It is as if our lives are merely extended department store experiences, where we commonly make hundreds of choices before we reach the checkout aisle. Although these decisions often rely on past experience-for which there is ample literature

Description-experience gap in choice deferral.

“…Previously, we saw that this increased likelihood biases choices towards alternatives with rare large pay-offs (Hills et al, 2013;Noguchi & Hills, 2015). The present results further indicate that this bias in choice is not a result of forced choice -people appear to develop preferences for alternatives with large pay-offs sufficiently enough to purchase an alternative.…”

“…Example screen-shots are provided in Figure 1. The set size of 2 and 35 alternatives are reported to induce changes in search behavior and subsequent choices in Hills et al (2013) and Noguchi and Hills (2015). Participants were asked to sample the alternatives as many times as they wanted and then decide whether to choose an alternative to purchase for £1.00 or to defer a choice and keep £1.00.…”

“…In addition, an interaction effect indicates that an effect of branch significantly depends on paradigm: χ 2 (1) = 11.48, β = 1.32, p < .001, ∆AIC = 9.48. In the description paradigm, choice is significantly less likely to be purchased in the four branch condition than in the two branch condition: In previous studies, we found that larger set sizes increase the likelihood that people encounter large pay-offs in the sampling paradigm (Hills et al, 2013;Noguchi & Hills, 2015). We also found this result in the present experiment: the maximum amount of pay-off which participant saw while sampling alternatives tends to be greater in the large sets than in the small sets: χ 2 (1) = 30.76, β = 1.81, p < .001, ∆AIC = 28.76.…”

“…Although research has suggested that people draw more samples from alternatives with higher complexity in pay-offs (Lejarraga, Hertwig, & Gonzalez, 2012), we do not expect the number of samples to scale sufficiently with the number of branches for people to realize that an alternative has multiple branches. Moreover in previous study, we found that people sampled less per alternative in a larger set (Hills, Noguchi, & Gibbert, 2013;Noguchi & Hills, 2015), which may make it CHOICE DEFERRAL 6 less likely for people to realize the number of branches. Thus, we predict that an increase in the number of branches will influence choice deferral more readily in the description paradigm than in the sampling paradigm.…”

Uptake and usage of an online prostate cancer treatment decision aid in Dutch clinical practice: A quantitative analysis from the Prostate Cancer Patient Centered Care trial

“…Choosing from a smaller choice set can be perceived as less difficult, resulting in a different information search behavior compared to patients who need information about more options. [23][24][25] 46 (78) 7 (12) 11 (19) 25 (71) 25 (71) 11 (57) 14 (18) 58 (76) Hospital B…”