Econometrica: Mar 2022, Volume 90, Issue 2

Range-Dependent Attribute Weighting in Consumer Choice: An Experimental Test
p. 799-830

Jason Somerville

This paper investigates whether the range of an attribute's outcomes in the choice set alters its relative importance. I derive distinguishing predictions of two prominent theories of range‐dependent attribute weighting: the focusing model of Kőszegi and Szeidl (2013) and the relative thinking model of Bushong, Rabin, and Schwartzstein (2021). I test these predictions in a laboratory experiment in which I vary the prices of high‐ and low‐quality variants of multiple products. The data provide clear evidence of choice‐set dependence consistent with relative thinking: price increases that expand the range of prices in the choice set lead to more purchases. Structural estimates imply economically meaningful effect sizes: the average participant was willing to pay around 17% more when a seemingly irrelevant option is added to their choice set.

Log In To View Full Content

Supplemental Material

Supplement to "Range-Dependent Attribute Weighting in Consumer Choice: An Experimental Test"

This online appendix contains material not found within the manuscript.

Read More View PDF