Compromise and attraction effects

Abstract

The Compromise Effect denotes the tendency to choose the intermediate object rather than the extreme object in a choice set. The Attraction Effect denotes the tendency to choose the object which has a worse alternative according to the desirable attributes in the choice set. Despite the validity and importance of this phenomenon it is neglected to incorporate both the Compromise and Attraction Effects in formal choice models and to test whether such models outperform the standard value maximization model. Employing a survey on USB's in this article, we suggest that (1) both the Compromise and Attraction Effects are valid (2) The violation of WARP is possible, (3) none of the models outperform others while there are cases that standard value maximization outperforms others.