Fact or Artifact Does the compromise effect occur when subjects face real consequences of their choices?

This study investigates context effects in general and the compromise effect in particular. It is argued that earlier research in this area lacks realism which is a major drawback to research conclusions and stated management implications. The importance of this issue is stressed by previous research showing that behavioral anomalies found in hypothetical experimental settings tend to be significantly reduced when real payoff mechanisms are introduced. Therefore, to validate the compromise effect, an enhanced experimental design is presented with participants making choices in the laboratory that are binding. We find that the compromise effect holds for real purchase decisions, and therefore is validated and not an artificial effect in surveys on hypothetical buying decisions. While conclusions and implications for marketing managers derived in previous work assume that context effects hold for real market decisions, the results created by this enhanced design close this gap in marketing literature.choice in context, compromise effect, irrelevant alternatives, hypothetical bias, experimental design

Experimental evidence of context-dependent preferences in risk-free settings

This study investigates context effects in general and the compromise effect in particular. It is argued that earlier research in this area lacks realism, a shortcoming that is a major drawback to research conclusions and stated management implications. The importance of this issue is stressed by previous research showing that behavioral anomalies found in hypothetical experimental settings tend to be significantly reduced when real payoff mechanisms are introduced. Therefore, to validate the compromise effect, an enhanced design is presented with participants making binding purchase decisions in the laboratory. We find that the compromise effect holds for real purchase decisions, and therefore is validated, and is not an artificial effect in surveys on hypothetical buying decisions. While conclusions and implications for marketing managers, derived in previous work assume that context effects hold for real market decisions, the results created by this enhanced design close this gap in the literature. --decision-making,anomalies,irrelevant alternatives,context effects

How Product Assortments Affect Buyer Preferences: Empirical Analysis of the Robustness of the Compromise Effect

Behavioral research revealed that product assortments can influence buyer preferences and affect purchase decisions between options of a product line. In this article, the compromise effect is investigated according to which the share of a product is expected to increase when it is in an intermediate position in an assortment subset. Since most of the previous studies on the compromise effect used artificial designs that lack realism, a limited external validity of experimental findings is to be supposed. This is a drawback, especially when decisions about compositions of real product lines should be supported. Therefore, an enhanced experimental design is presented with subjects making unforced and binding choices between real brands, which is similar to regular purchase decisions. Although results of our studies prove robustness, the magnitude of the compromise effect is significantly reduced in such real marketplace scenarios hence notably influencing predictions of sales and profitability of product lines.Consumer Behavior; Compromise Effect; Consumer Preferences; Assortment Planning; Experimental Design; Choice in Context

When Judgments and Preferences Fail to Conform: Research on Preference Reversals for Product Purchases

In this paper, the preference reversal phenomenon known from risk research is investigated according to which subjects prefer gamble A over B in competitive decisions although they reveal higher valuations in terms of a cash equivalent (CE) or a willingness to pay (WTP) for the latter when gambles are assessed separately in monadic judgments. In contrast to the experimental settings of research on risky choices, our studies observed unforced and binding purchase decisions of experienced consumers between real products in natural shopping environments. Results confirm robustness of preference reversals in risk-free purchase decisions indicating that orderings of product preferences reverse significantly between evaluations in monadic and competitive designs. While recent pricing research has been largely focused on monadic designs and suggested BDM mechanisms or second-price auctions for elicitations of consumers’ true willingness to pay, results of our studies indicate a substantial discrepancy between preference orders based on monadic judgments and preferences that consumers reveal in competitive purchase decisions.Preference Reversals, Willingness to Pay, Monadic Designs, Competitive Designs, Pricing Research, Procedure Invariance

A new algorithm for electrostatic interactions in Monte Carlo simulations of charged particles

To minimise systematic errors in Monte Carlo simulations of charged particles, long range electrostatic interactions have to be calculated accurately and efficiently. Standard approaches, such as Ewald summation or the naive application of the classical Fast Multipole Method, result in a cost per Metropolis-Hastings step which grows in proportion to some positive power of the number of particles N in the system. This prohibitively large cost prevents accurate simulations of systems with a sizeable number of particles. Currently, large systems are often simulated by truncating the Coulomb potential which introduces uncontrollable systematic errors. In this paper we present a new multilevel method which reduces the computational complexity to O(log(N)) per Metropolis-Hastings step, while maintaining errors which are comparable to direct Ewald summation. We show that compared to related previous work, our approach reduces the overall cost by better balancing time spent in the proposal- and acceptance- stages of each Metropolis-Hastings step. By simulating large systems with up to N=10^5 particles we demonstrate that our implementation is competitive with state-of-the-art MC packages and allows the simulation of very large systems of charged particles with accurate electrostatics

A new algorithm for electrostatic interactions in Monte Carlo simulations of charged particles

To minimise systematic errors in Monte Carlo simulations of charged particles, long range electrostatic interactions have to be calculated accurately and efficiently. Standard approaches, such as Ewald summation or the naive application of the classical Fast Multipole Method, result in a cost per Metropolis-Hastings step which grows in proportion to some positive power of the number of particles $N$ in the system. This prohibitively large cost prevents accurate simulations of systems with a sizeable number of particles. Currently, large systems are often simulated by truncating the Coulomb potential which introduces uncontrollable systematic errors. In this paper we present a new multilevel method which reduces the computational complexity to $\mathcal{O}(\log(N))$ per Metropolis-Hastings step, while maintaining errors which are comparable to direct Ewald summation. We show that compared to related previous work, our approach reduces the overall cost by better balancing time spent in the proposal- and acceptance- stages of each Metropolis-Hastings step. By simulating large systems with up to $N=10^5$ particles we demonstrate that our implementation is competitive with state-of-the-art MC packages and allows the simulation of very large systems of charged particles with accurate electrostatics.Comment: 19 pages, 9 figures, 1 tabl

A lattice calculation of B -> K(*) form factors

Lattice QCD can contribute to the search for new physics in b -> s decays by providing first-principle calculations of B -> K(*) form factors. Preliminary results are presented here which complement sum rule determinations by being done at large q^2 and which improve upon previous lattice calculations by working directly in the physical b sector on unquenched gauge field configurations.Comment: 6 pages, 4 figures, Proceedings of CKM2010, the 6th International Workshop on the CKM Unitarity Triangle, University of Warwick, UK, 6-10 September 201