The Effect of Experience on Context-dependent Decisions

Does the well-documented decoy effect emerge in decisions from experience among risky options? We conducted a series of experiments where participants made choices between gambles, and we varied whether participants learned about the options from description, experience, or both. Our results consistently showed no traces of the decoy effect when participants learned from experience. Even when participants read precise descriptions of the options, actually experiencing those options eliminated the decoy effect. Moreover, in decisions under risk (decisions from description), the decoy effect is less robust than previously thought. The decoy effect only emerged in an experimental design in which we used two decoys generating attraction for different options but did not emerge when only one decoy was used. Increasing the distance between the decoy and the target did not make the decoy effect emerge in decisions from experience but seemed to reduce the decoy effect in decisions from description. Overall, we identify two boundary conditions for the decoy effect in decisions under risk: First, it is not robust to situations that involve learning from experience; and second, the attraction of a single decoy may not be sufficient to observe a decoy effect. Copyright (c) 2018 John Wiley & Sons, Ltd.