Single-Option Aversion
نویسندگان
چکیده
This article documents single-option aversion, an increase in consumers’ desire to search when faced with a single option. This effect can lead to a product being chosen more often when competing alternatives are included in the choice set, contrary to various rational models of search, as well as to recent research on choice conflict showing that additional options can lead to higher deferral rates. A series of lab studies document this effect, differentiate it from other context effects, and test some of its boundary conditions. The results suggest that single-option aversion is not driven by the information provided by the additional options, that the desire to search is critical for this effect to occur, and that the effects of singleoption aversion are not limited to the immediate choice set. These results have both practical and theoretical implications for the understanding of consumer search and choice deferral.
منابع مشابه
Option Pricing in the Large Risk Aversion, Small Transaction Cost Limit
We characterize the price of a European option on several assets for a very risk-averse seller, in a market with small transaction costs as a solution of a nonlinear diffusion equation. This problem turns out to be one of asymptotic analysis of parabolic PDE, and the interesting feature is the role of a nonlinear PDE eigenvalue problem. In particular, we generalize previous work of Guy Barles a...
متن کاملEntrepreneurship and Loss-Aversion in a Winner-Take-All Society
We study entrepreneurship in a setting where identical, loss-averse individuals choose between a risky entrepreneurial path and a safe outside option. The combination of effort and luck determine the single winner of the entrepreneurship market. We obtain a closed form solution to equilibrium entry and effort decisions. The novel implications of the model are: (1) Entrepreneurial effort increas...
متن کاملWhat drives investor risk aversion? Daily evidence from the German equity market
Stock prices move as corporate earnings prospects change but they also move as investors change their aversion to risk. Aversion to risk gives rise to a risk premium, which consists of an expected extra return that investors require to be compensated for the risk of holding stocks. Option prices are a unique source of information for the estimation of risk premia. The way strike prices in optio...
متن کاملEnvironment, Uncertainty, and Option Values
2.1 THE BASIC FRAMEWORK....................................................................................................................... 4 2.2 RISK AVERSION.................................................................................................................................... 5 2.3 THE VALUE OF CHANGES IN RISK ......................................................................
متن کاملExtremeness Aversion and Attribute-Balance Effects in Choice
Consumers often make decisions based on the extremeness of choice alternatives. Prior research has argued that extremeness aversion is a function of the relational properties of choice alternatives and that the middle option, defined such that its attribute values are between the values of the other alternatives, is always viewed as the least extreme, compromise option. The attribute-balance hy...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2013