The Research Review and Prospect of Compromise Effect

Abstract

The rational choice theory holds that consumers will always choose the product with the maximum utility, while the context effect emphasizes that consumers' choice will change with the change of the situation, and the rational decision is not always made. As a model of context effect, the compromise effect points out that when an extreme option is added to the selection set, the original option will become a compromise option and become more attractive. On the basis of a systematic review of the literature related to the compromise effect, this paper summarizes and prospects the compromise effect. First of all, this paper introduces the concept of the compromise effect, and the similarities and differences between the compromise effect, the context effect and the attraction effect. Secondly, this paper discusses the formation mechanism of compromise effect from the perspective of reason seeking, loss aversion and rational decision-making. Third, based on the literature review, this paper discusses the impact factors of the compromise effect. Finally, this paper puts forward the enlightenment of the compromise effect to the marketing practice, and points out the future research direction.

Attraction effect in crowded decision spaces: exploring the impact of decoys in choices among numerous options

“…To date, to the best of our knowledge no study has empirically investigated how the presence of intermediate compromise alternatives can modulate the elicitation of the attraction effect. Since it is well known that in a ternary choice set, decision makers already have a good reason to prefer the middle option (Li, 2020), we assumed that targeting the middle option could interfere with the AE elicitation. However, if this is the case, we should have been able to elicit AE by simply shifting the decoy target (from the compromise to an extreme option).…”