Preference Reversals: Oh Yeah? Did we change our mind?

So how can one’s change decision change based on how information is presented?

Recently, we encountered a strange situation in recruitment. We were looking at two resumes separately once and later together. When we evaluated separately we rejected Candidate A; but a week later when we evaluated jointly, we accepted him over Candidate B. Here is all the data we had: Candidate A had developed several marketing campaigns for about 5 years and had no college education. Candidate B had developed marketing campaigns for under 2 years and had a college degree. Everything else, including the firm that they were working last, was similar. The recruitment team cried foul.

Why would we reverse our preferences so? Let me provide another example:

Used car 1 has run 1,000 kilo meters and there is a dent on the front hood.

Used car 2 has run 9,000 kilo meters.

Please imagine that you evaluated the two options separately, as if the other option did not exist. Which one is your choice? Probably you will choose the second option. And now imagine evaluating the options together. Probably you now choose the first option. Research confirms that you are not alone.

Hsee, Loewenstein, Bount and Bazerman in their research state the reason to be “non-evaluability”; “some attributes are easy to evaluate independently, whereas other attributes are more difficult to evaluate independently.” In the above example, it is difficult to evaluate the impact of “a dent on the front hood”. Therefore, when evaluated independently, car 1 would be less preferred than car 2. However, when jointly evaluated, “no dent” and “a dent on the front hood” is not only comparable but the relative advantage of 1,000 kilo meters springs out when compared to 9,000 kilo meters.

Here are two more examples:

1. (a) Rs. 10,000 flood relief to you and Rs. 11,000 to your neighbour, or (b) Rs. 8,000 flood relief to you and your neighbour.

Possibly, option B would be chosen more when evaluated singly; there is a sense of equity which is absent in option 1. However, when jointly evaluated, I think we will choose the first option merely because it just has higher pay-out than the second.

2. (a) mp3 player for about 4000 songs with THD of 0.0005%, or (b) mp3 player for about 10,000 songs with 0.02% THD.

Lower the THD (Total Harmonic Distortion) better the fidelity. Again, the THD is difficult to evaluate independently. What does 0.02% THD mean to us when this this information is presented in isolation? Therefore, the number of songs predominates decision making when the options are presented singly. However, when the options are presented together, 0.0005% THD is far more superior than 0.02% THD and hence the preference shifts to the first one.

Clearly, the implications in for search engines are high. There is definite requirement of presenting key information in a format that is understandable and comparable.

For us, the age old adage of having choices on the table to compare is important. More so if the alternatives have attributes that are difficult to understand or evaluate.

We went ahead with Candidate A; so much for consistency in decision making!!

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