Consumers undervalue multi-option alternatives in two-stage choice. Invited for revision.
The role of attention in opportunity cost neglect and consideration. (2025). Cognition.
Choices necessitate opportunity costs: choosing one option means foregoing another. Despite their critical role in decision making, people often neglect opportunity costs and are less likely to make purchases when reminded of them. Here, we seek to understand whether and how opportunity-cost neglect can be explained by attention, a relationship that has been proposed but not explicitly tested. Participants made eye-tracked, incentivized purchase decisions in two conditions: one with implicit opportunity costs (e.g., “Buy” vs. “Do Not Buy”) and one with explicit opportunity costs (e.g., “Buy” vs. “Keep Money”). Across two studies (approximately 30,000 choices), we find lower purchase rates when opportunity costs are explicit. More importantly, we show that the relationship between attention and opportunity cost considerations is two-fold. First, the amount of attention to the outside option is greater when opportunity costs are explicit, which partly accounts for the effect of opportunity cost salience on choice. Second, for some framings, the predictive power of attention to opportunity costs is greater when opportunity costs are explicit. Using the attentional drift-diffusion model, we model the effect of opportunity cost salience on choice via attention. These findings help explain why people are more likely to purchase when explicit opportunity cost reminders are absent.
High-value decisions are fast and accurate, inconsistent with diminishing value sensitivity. (2022). PNAS.
It is a widely held belief that people’s choices are less sensitive to changes in value as value increases. For example, the subjective difference between $11 and $12 is believed to be smaller than between $1 and $2. This idea is consistent with applications of the Weber-Fechner Law and divisive normalization to value-based choice and with psychological interpretations of diminishing marginal utility. According to random utility theory in economics, smaller subjective differences predict less accurate choices. Meanwhile, in the context of sequential sampling models in psychology, smaller subjective differences also predict longer response times. Based on these models, we would predict decisions between high-value options to be slower and less accurate. In contrast, some have argued on normative grounds that choices between high-value options should be made with less caution, leading to faster and less accurate choices. Here, we model the dynamics of the choice process across three different choice domains, accounting for both discriminability and response caution. Contrary to predictions, we mostly observe faster and more accurate decisions (i.e., higher drift rates) between high-value options. We also observe that when participants are alerted about incoming high-value decisions, they exert more caution and not less. We rule out several explanations for these results, using tasks with both subjective and objective values. These results cast doubt on the notion that increasing value reduces discriminability.