A Stochastic Comparison-Grouping Model of Multialternative Choice: Explaining Decoy Effects

Abstract

Based on Guo and Holyoak's (2002a, 2002b) work, we propose a stochastic comparison-grouping theory of multialternative decision making to explain three contextinduced violations of rational choice.The attraction effect and the similarity effect are explained by stochastic comparison grouping, according to which similar alternatives are compared more frequently than dissimilar alternatives are.The compromise effect is explained by the assumption that attribute values are perceived according to a basic psychophysical function, in addition to the comparison grouping mechanism.Furthermore, this model explains individual differences in choice by assuming interpersonal differences in pre-existing attitude toward products.