| Most research in consumer decision making examines situations in which consumers make final decisions considering all available options at once. In contrast, the current research examines decisions that can be best viewed as a sequence of smaller or intermediary decisions that lead to a final outcome. In this type of situation, consumers are not presented with all options at the same time, but rather learn about a new option after having already considered and rejected some of the initial alternatives. We refer to this type of decision as a multiple-stage choice. Previous research in two-stage choice has identified an increased preference for the option that is presented after an initial selection has been made, ostensibly due to loss aversion. Drawing on past research on decision making models, we propose an alternative choice model that is hypothesized to better capture the advantage for the new (also referred to as isolated) option. We argue that instability of the criteria used in each choice stage and not loss aversion is the main driver of the observed advantage for an option presented at a later choice stage. We derive predictions for each account and contrast them in a series of laboratory experiments. Results are supportive of the proposed mechanism and show no evidence for loss aversion as a viable explanation for the investigated phenomenon. |
