Multi-attribute Decision Making

• Decision making under ________
• _________ between multiple attributes
• Which attribute is more important?
• Trade-off makes the choice difficult

• Is more really better?
• Economists tell us more options are better
• People make _______ choices
• Ensures something for everyone
• Psychologists show that adding options causes irrational behavior
• Choices are not __________
• ________ is avoided

• 2 options:
• Sony CD player       Average quality        $125            40%
• Aiwa CD Player       High quality             $145             60%
• 3-options:
• Sony CD player       Average quality        $125             ___%
• Aiwa CD Player      High quality               $145             ___%
• RCA CD player      Below average quality $125              -

• Attraction effect (Huber, Payne, & Puto 1982)
• Violates normative rule of ____________
• Increasing the number choices should not change relative preferences among the original options
•  unless new option offers additional information
• If I prefer the Aiwa to the Sony then it should stay that way– even when the RCA CD player is there

Why does this happen?

• ______ highlight relationships among the alternatives
• _________- target looks better because it has a relational advantage over the decoy
• Competitor has no such advantage
• Reduces conflict– provides a justifiable reason to choose
• Avoids complicated trade-off analysis

Alleviates post-decision ________

Attraction Effect
The patient is a 56-year-old female.  She was widowed six weeks ago, after watching her husband suffer from an illness for several months.  During a routine physical examination, the patient reports that for the past three weeks she has had difficulty sleeping, diminished appetite, increased anxiety, and a lack of interest in previously enjoyed activities.  Your diagnosis is New Onset Depression.  The patient is an appropriate candidate for antidepressant medication.

 

Med	Effectiveness	Side Effects
Serzone	Superior to a placebo on 3 out of 4 depression measures	25% report dry mouth, nausea,  somnolence.
Paxil	Superior to a placebo on 2 out of 4 depression measures	5% report dry mouth, nausea,  somnolence
Tofranil	Superior to a placebo on 3 out of 4 depression measures	35% report dry mouth, nausea,  somnolence. Also hallucinations, and delusions.

Adding Options, Part 2

• Low conflict:
• Suppose you are considering buying a new CD player and have not yet decided which model to buy. You pass by a store that is having a one-day clearance sale. They offer a popular SONY player for just $99, well below the list price. Do you?
• B. buy the SONY player (___%)
• C. wait until you learn more about the various models (___%)
• High conflict:
• You pass by a store that is having a one-day clearance sale. They offer a popular SONY player for just $99, and a top-of-the-line AIWA player for just $169, both well below the list price. Do you?
• A. buy the Aiwa player
• B. buy the SONY player
• C. wait until you learn more about the various models (___%)

• Family physicians read the following scenario:
• The patient is a 67-year-old farmer with chronic right hip pain.  The diagnosis is osteoarthritis.  You have tried several nonsteroidal anti-inflammatory agents (e.g., aspirin, naproxen, and ketoprofen) and have stopped them because of either adverse effects or lack of efficacy.  You decide to refer him to an orthopedic consultant for consideration for hip replacement surgery.  The patient agrees to this plan.
• Basic Version
• Before sending him away, however, you check the drug formulary and find that there is one nonsteroidal medication that this patient has not tried (ibuprofen).  What do you do?
•  A. refer to orthopedics and also start ibuprofen
•  B. refer to orthopedics and do not start any new medication (___%)
• Expanded Version
• Before sending him away, however, you check the drug formulary and find that there are two nonsteroidal medications that this patient has not tried (ibuprofen and piroxicam).  What do you do?
•  A. refer to orthopedics and also start ibuprofen
•  B. refer to orthopedics and also start piroxicam
•  C. refer to orthopedics and do not start any new medication (___%)
• Redelmeier, D.A. & Shafir, E. (1995).  Medical decision making in situations that offer multiple alternatives.  JAMA, 273(4), 302-305.

• Decision makers want a defensible ________ for choosing one option.
• Pick the option with the best supporting reason
• Not necessarily the option with highest _________
• Leads to inconsistencies when context changes make different reasons salient
• Feeling _____________ heightens the search for defensible reasons.

Reasons Pro and Con

Spot A	Average weather Average beaches Medium-quality hotel Medium-temperature water Average nightlife Prefer	Prefer	Cancel
Spot B	Lots of sunshine Gorgeous beaches and coral reefs Ultra-modern hotel Very cold water Very strong winds No nightlife

• Both questions ask which vacation you want, so prefer vs. cancel should be complimentary
• Pp (68%) + Pc (48%) > 100%
• Compatibility
• When ________, focus on positive attributes
• When ________,  focus on negative attributes
• No good reason to either choose or reject A
• Very good reasons for both choosing and rejecting B

_____________ effect (Tversky & Shafir, 1992)

• Imagine that you have just taken a tough qualifying examination. It is the end of the term, you feel tired and run down, and are not sure you passed. In case you failed you have to take the exam again– after the Christmas holiday. You now have the opportunity to buy a very attractive 5-day Christmas vacation package to Hawaii at an exceptionally low price. The special offer expires tomorrow, while the exam grade will not be available until the following day. Would you?
•  Buy the vacation package?
•  Not buy the vacation package?
•  Pay a $5, non-refundable fee in order to secure the deal until after you know the exam outcome?
• Imagine that you have just taken a tough qualifying examination. It is the end of the term, you feel tired and run down, and you find out that you [passed/failed. You will now have to take the exam again after the Christmas holidays]. You now have the opportunity to buy a very attractive 5-day Christmas vacation package to Hawaii at an exceptionally low price. The special offer expires tomorrow. Would you?
•  Buy the vacation package?
•  Not buy the vacation package?
•  Pay a $5, non-refundable fee in order to secure the deal until after you know the exam outcome?

• Disjunction effect- a disjunction of events (pass or fail) results in the same outcome
• The outcome is irrelevant- majority of students book vacation regardless of exam outcome
• Will pay a premium for the rights to a good reason for choosing
• Pursuing information that seems relevant, but actually won’t affect decision.
• But the information determines the __________ for the decsion.