Rahul Bhui (MIT)

“A rational account of the repulsion effect”

Abstract: The attraction effect occurs when the presence of an inferior option (the decoy) increases the attractiveness of the option that dominates it (the target). Despite its prominence in behavioral science, recent evidence points to the puzzling existence of the opposite phenomenon—a repulsion effect. In this project, we formally develop and experimentally test a normative account of the repulsion effect. Our theory is based on the idea that the true values of options are uncertain and must be inferred from the available information. A low-value decoy can signal that the target is also of low value when both are believed to be generated by a similar process. This theory provides a unifying account of several phenomena linked to the repulsion effect across both economic and perceptual decision making, and informs us about when decoys can hurt, contrary to popular thought.

Time: 9:00 am AEDT (UTC+11:00), Wednesday, 27 October

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