Similarity-Based Sampling: Testing a Model of Price Psychophysics

How is the perceived attractiveness of a price influenced by the context or sample within which it appears? Current models of price judgment are often based on psychophysical models of the contextual judgment of non-economic stimuli. These existing models accommodate a number of contextual effects, but do not allow for the possibility, motivated by independent psychophysical data, that the weighting of comparison items within a sample may vary with their similarity to the target. Here we address this issue by using results from two experiments to estimate the parameters of the GEMS (Generalized Exemplar Model of Sampling) model. In both Experiment 1, when prices are simultaneously presented, and in Experiment 2, when prices are presented sequentially, some evidence for similarity-based sampling is obtained.