Asymmetric Dominance: Generalizations and Lessons Joel Huber-Duke University

An example from the marketplace

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

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

Example of Asymmetric Dominance Effect Ambience Food Quality + (Q=***, A=****) + (Q=****, A=***) What happens if we add a restaurant with great ambience but lower quality? + (Q=**, A=****) 2% Shr60% Shr 38% Shr

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

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

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

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

Example of Asymmetric Dominance Effect Ambience Food Quality + (Q=***, A=****) + (Q=****, A=***) What happens if we add a restaurant with great ambience but lower quality? + (Q=**, A=****) 2% Shr60% Shr 38% Shr

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

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.

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?

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

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!