Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331640 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12175
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
Several behavioral models assume that choice over multi-attribute goods is systematically affected by the ranges of attribute values. Two recurring principles in this literature are contrast, whereby attributes with larger ranges attract attention and are therefore overweighted, and normalization, whereby attributes with larger ranges are underweighted as fixed differences appear smaller against a larger range. These principles lead to divergent predictions, and yet, both contrast-based and normalization-based models have found strong empirical support, albeit in different contexts and with different experimental designs. The question remains: when does one effect emerge over the other? We experimentally test a unifying explanation: normalization dominates in simple choices, while contrast dominates in complex choices. We conduct an experiment with real-effort tasks in which we manipulate attribute ranges in both simple and complex choices. We find that, indeed, contrast dominates as the number of attributes increases. We also find that contrast emerges with cognitive load induced by time pressure.
Subjects: 
multi-attribute choice
range effects
focusing
relative thinking
salience
bottom-up attention
context dependence
complexity
experiment
JEL: 
C91
D91
D12
Document Type: 
Working Paper
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