Asymmetric Dominance: Generalizations and Lessons

1. Asymmetric Dominance: Generalizations and Lessons Joel Huber-Duke University

2. An example from the marketplace

3. What instigated the initial study? • Duncan Luce argued that only regularity had not been violated • Regularity specifies that you cannot increase the probability of choosing an item by adding an item to the set • John Payne, Chris Puto and I then designed a task that combined many known context effects to violate regularity • We did not know whether it would work; in hindsight, it was a low probability experiment

4. Example of Asymmetric Dominance Effect For a big dinner you are indifferent between these two restaurants Ambience + (Q=***, A=****) 50% Shr + (Q=****, A=***) 50% Shr Food Quality

5. Example of Asymmetric Dominance Effect What happens if we add a restaurant with great ambience but lower quality? Ambience + (Q=**, A=****) + (Q=***, A=****) 2% Shr 60% Shr + (Q=****, A=***) 38% Shr Food Quality

6. How robust is the effect? • Birds do it, bees do it • Consumers in markets choosing beans do it • Works with real gambles • Works with complex stimuli • Attributes do not have to be common, or even continuous, only ordered

7. What makes the asymmetric dominance effect stronger? • Accountability, need to justify • Less processing capacity or time pressure • Greater attribute knowledge • Presence of a no-choice option • Choices over ratings

8. What makes it go away? • Repeated choices within a category • Does not happen in choice based conjoint • Asymmetric dominance requires current construction of preferences • Lack of transparency in the dominance relationship • Preference ambiguity within attributes • Difficulty realizing one alternative is dominant

9. General theoretical approaches • Attribute importance (weight shift) • Market inference • Range-importance effect • Position of alternatives change (perceptual shift) • Anchoring on the dominated alternative • Range-frequency mechanism • Utility from dominance (value shift) • Conscious-articulate • Automatic-inarticulate

10. Example of Asymmetric Dominance Effect What happens if we add a restaurant with great ambience but lower quality? Ambience + (Q=**, A=****) + (Q=***, A=****) 2% Shr 60% Shr + (Q=****, A=***) 38% Shr Food Quality

11. General theoretical results • Most hypothesized effects matter, but differ in their magnitude and generality • Attribute weight effects are hardest to derive and prove (little carryover) • Perceptual effects matter, mostly when perceptual judgments (ratings) are evoked • For choice, direct short-term, automatic utility from dominance appears to be the most important process

12. Remaining theoretical questions • Impact differs by attribute used—high priced decoys are far more effective than low priced ones • Detailed processing account—what happens to search after discovering a dominance relationship • Unified response surface model--integrating dominated, compromise and phantom effects.

13. Asymmetric dominance–more than a quarter century old! • Asymmetric dominance has come of age as a classic context effect, like loss aversion and framing • Now assumed, used as a manipulation to bring about preference for an item • Schemer-schema: How much do people use ASD to affect other’s choices? What is their reaction to such manipulation?

14. Why asymmetric dominance spawned so much research • Effect is robust and general, but perplexing • Easy to conceptualize—two dimensions, decoy, target, competitor provide a good story • Easy to run, multiple categories, quick choices • Open-ended conceptually: Expands into different tasks, compromise and phantom alternatives • Open-ended theoretically. It can be used to validate many different theories

15. Final Lessons • Conduct research in areas where the surprise coefficient is large • Simple story, clear characters • Domain not explored • Relevant to markets • Do not try to resolve all the issues…leave room for other questions and researchers • Be alert for anomalies, public challenges, and emperors lacking clothes!