Scope Insensitivity and the 'Mere Token' Effect

Urminsky, Oleg; Kivetz, Ran
April 2011
Journal of Marketing Research (JMR);Apr2011, Vol. 48 Issue 2, p282
Academic Journal
Decisions often involve trade-offs between a more normative option and a less normative but more tempting one. The authors propose that the intrapersonal conflict that is evoked by choices involving incompatible goals can be resolved through scope-insensitive justifications. The authors describe one such mechanism, the 'mere token' effect, a new phenomenon in decision making. They demonstrate that adding a certain and immediate mere token amount to both options increases choices of the later-larger option in intertemporal choice and of the riskier-larger option in risky choice. The authors find this effect to be scope insensitive, such that the size of the token amount does not moderate the effect. They show that intrapersonal choice conflict underlies the mere token effect and that reducing the degree of conflict by increasing the psychological distance to the choice outcomes debiases the effect. Moreover, they show that the mere token effect is enhanced when (1) opposing goals in choice are made salient and (2) the choice options represent a starker contrast that generates greater conflict. The authors empirically rule out alternative explanations, including diminishing marginal utility, normative and descriptive utility-based models, liquidity constraints, and naive diversification. They discuss the direct implications of the mere token effect for the marketing of financial services and, more generally, for consumer preference toward bundles and multiattribute products.


Related Articles

  • Psychophysical time and the anomalies in decision over time and under risk. Ruokang Han; Taiki Takahashi // NeuroPsychoEconomics Conference Proceedings;2013, p39 

    People exhibit inconsistent time preference in intertemporal choice (e.g. time inconsistency) and paradoxical risk preference in probabilistic choice (e.g. certainty effect). The normative economic theory considered these behaviors as anomalies because they violate the assumption of rationality....

  • Two envelopes. Sobel, Jordan Howard // Theory & Decision;Jan94, Vol. 36 Issue 1, p69 

    Examines two kinds of cases to clarify the puzzling aspects of the two envelopes problem. Option of switching envelopes with unknown cash amount; Taming the problem's paradox; Definition of the expected monetary values; Effect of having a finite upper boundary; Power of dominance arguments.

  • A note on the two envelopes problem. Rawling, P. // Theory & Decision;Jan94, Vol. 36 Issue 1, p97 

    Provides a resolution for all variants of the two envelopes puzzle which presents an option for switching envelopes with unknown cash amount. Two ways to reason about the choice of action; Similarity to a rigid designator problem.

  • Wise Decisions. Zeckhauser, Bryn; Sandoski, Aaron // Personal Excellence Essentials;Feb2009, Vol. 14 Issue 2, p10 

    The article discusses the principles that can be applied by leaders to make great decisions. It explains why having the best and first-hand information is essential to decision-making. It offers tips on overcoming loss aversion and the fear of taking risk. It relates the role of one's vision in...

  • Mental Representations of Uncertainty and Risk. de Langhe, Bart // Advances in Consumer Research;2012, Vol. 40, p284 

    The article presents abstracts on the mental representations of uncertainty and risk including the understanding of lay people with regards statistical moments of mean, variance, skewness and kurtosis, the effect of reference point formation on risky choice behavior, and the role of payoff ratio...

  • Risk behavior for gain, loss, and mixed prospects. Brooks, Peter; Peters, Simon; Zank, Horst // Theory & Decision;Aug2014, Vol. 77 Issue 2, p153 

    This study extends experimental tests of (cumulative) prospect theory (PT) over prospects with more than three outcomes and tests second-order stochastic dominance principles (Levy and Levy, Management Science 48:1334-1349, ; Baucells and Heukamp, Management Science 52:1409-1423, ). It considers...

  • Aspirations as reference points: an experimental investigation of risk behavior over time. Hoffmann, Arvid; Henry, Sam; Kalogeras, Nikos // Theory & Decision;Aug2013, Vol. 75 Issue 2, p193 

    This paper examines the importance of aspirations as reference points in a multi-period decision-making context. After stating their personal aspiration level, 172 individuals made six sequential decisions among risky prospects as part of a choice experiment. The results show that individuals...

  • The Perception of Risk and Risk Taking Behavior: Implications for Incident Prevention Strategies. Powell, Colin // Wilderness & Environmental Medicine;Spring2007, Vol. 18 Issue 1, p10 

    Core to incident prevention strategies is the need to identify factors that influence the decision-making process linked to risk-taking behavior. Participants' perception of risk and associated norms and practices may play a key role in relation to decisions to engage with a risk and subsequent...

  • Neural foundations of the asymmetric dominance effect in decision making under risk. Mohr, Peter N. C.; Heekeren, Hauke R.; Rieskamp, Jörg // NeuroPsychoEconomics Conference Proceedings;2013, p48 

    Many economic theories of decision making assume that individuals evaluate available choice alternatives independently of each other. This means that the subjective value or expected utility of an option does not change when another option is added to the choice set. However there is a...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics