CHOICE BLINDNESS IN CONSUMER DECISIONS

Prepared By

Anshul R

Achyudh K Ram

Akilesh Lakshminarayanan

Shatrujit Aditya Kumar

Kartik Sathyanarayanan

Bhargav Sriraman

November 2013

A REPORT

ON

CHOICE BLINDNESS IN CONSUMER DECISIONS

Prepared For

Dr. K. A. Geetha,

Assistant Professor,

Department of Humanities and Management

By

Anshul R

(2013A7PS114G)

Achyudh K Ram

(2013B3PS439G)

Kartik Sathyanaranan

(2013A7PS037G)

Shatrujit Aditya Kumar

(2013A7044G )

Akilesh

Lakshminarayanan

(2013B3PS471G)

Bhaargav Sriraman

(2013A7PS006G)

In partial fulfillment of the requirements of

BITSF112: Technical Report Writing

ACKNOWLEDGEMENTS

We would like to thank our instructor and mentor Dr. K.A.

Geetha for inspiring and having faith in us to conduct a

psychological study. We would like to thank the 20 odd

participants of the pilot study spread across India for co-

ordinating among themselves and giving us non-redundant

and effective input on the study

This report borrows from the flow of topics, parts of the

content and the study conducted as a part of the thesis of

Jessica Schanzer on the same topic. (Schanzer, 2013). We are

indebted her thesis.

Abstract

Humans are known for their intuition and split second decision making.

A lesser known aspect of humans is their low attentiveness in making

choices. Common sense dictates that a radical change in a situation and

hence the choices made based on that be immediately noticed. It turns

out that this is a baffling misunderstanding. There are robust and

replicable experiments that demonstrate this fallacy. This

counterintuitive phenomenon is called choice blindness.

One such study was conducted to find out the ramifications of choice

blindness in the domain of consumer decision-making. The study

targeted 63 college students between ages 17 and 22. Owing to the

abundance of choices involved in buying a cell phone or a laptop, that

particular niche of the consumer market was chosen as the subject of

the study. Multiple questionnaires were designed to identify the

parameters that lead to choice blindness. Subjects were asked to choose

a model and verbally justify their choice. They were asked to choose

between models again; this time, some parameters of the cell phone or

laptop were manipulated. This report analyses the data collected from

the study to find the prevalence of choice blindness.

The study revealed that nearly 36.24% of the participants experienced

choice blindness. However, extending this study to apply the results to

the real world is not possible because of the experimental methodology.

Table of Contents

Abstract ............................................................................................................ 4

Introduction .................................................................................................... 8

Choices .......................................................................................................... 8

Psychology behind choices ........................................................................ 9

Validity of behavioral economics ............................................................. 11

Choice Blindness .......................................................................................... 14

Motivation to look for choice blindness ................................................. 14

A setting for choice blindness .................................................................. 16

Choice Blindness ....................................................................................... 19

Study .............................................................................................................. 21

Study Design .............................................................................................. 21

Participants ................................................................................................ 21

Questionnaire ............................................................................................ 22

Procedure ................................................................................................... 22

Results ......................................................................................................... 23

Discussion and Conclusion ...................................................................... 26

Bibliography .................................................................................................. 28

Appendix I – Sample Questionnaires ......................................................... 30

Appendix II – Data Collected ....................................................................... 35

Introduction

Choices

People make countless choices in their day-to-day life: some are slow

and well thought out; some are split second choices; some carry very

little significance; and others greatly impact our lives. For all the

intimate familiarity we have with everyday choice and decision-making,

identifying the underlying mechanism of this process is difficult. Even

with decades of research from two different perspectives, the process

has not been completely identified.

Decision making has been a topic of extensive research in the field of

psychology. The sheer number of factors influencing a decision makes

the analysis daunting. Apart from this, these factors are not

independent of each other. This interdependence calls for a scenario by

scenario analysis of decisions. This terse portion will be expanded upon

in the forthcoming section.

The outcome of the psychological research on decision making has

been applied to the real world through economics. This field of study is

called behavioral economics. However, this is not a full-fledged theory

as of now; there is some disagreement about the validity of the

psychological studies pertaining to behavioral economics. Also, there is

an inherent disparity in the two fields – psychology lacks mathematical

structure1 whereas economics is built from a set of mathematical rules.

Psychology behind choices

Analyzing the decision making process, as mentioned before, is a

daunting task. The different factors that influence decisions mostly

stem from people’s irrationality. Had people been cold, calculating

profit machines, the situation could be mathematically modelled and

even the most unstable economic balance could have been achieved.

The different factors under irrationality can be further sub-classified

into relative thinking, anchoring, zero cost, emotional decision-making,

ownership, social herding, expectations and predefined options. A

detailed exposition of these factors can be found in (Ariely, 2008). A

quick discussion of factors related to the topic follows.

Relative thinking is one of the most subtle psychological processes.

People constantly compare things with something else and yet, they are

not aware of it in many cases. This is constantly exploited by

companies throughout the world.

1 This is the erroneous “reason” behind classifying psychology as pseudo-science

Anchoring is a process that sets the standard against which people will

compare similar things. People can compare things only when they

have a standard. When they see a product, say a “good” projector, for

the first time, its attributes (aesthetics, features, price and so on)

become the arbitrary baseline against which other projectors will be

compared.

The words “free” and/or “discount” have a huge impact on decisions

made by people. People tend to choose things with a discount or an

offer without paying close attention to all the details. Usually, we are

afraid of loss and hence are conscious about the choices we make. That

is the primary reason behind comparing things – to make the best

choice. When something is free, we blindly assume that there is no

risk/loss in that option and go for it.

Emotional decision making is perhaps the most clichéd counterintuitive

fact known to mankind. People know that an emotional mindset is

never the best judge in taking a good decision.

Social herding or group dynamics comes into play when there are a

group of people. The actions and decisions made by a member of that

group is influenced by the other members of the group. Simply put,

people more or less adhere to social norms when they are in groups

and believe in the wisdom of the crowd.

Expectations and past memories influence decisions to a very large

extent. For example, some volunteers were put in a brain scanner and

were asked to compare the tastes of two soft drinks A and B without

specifying the soft drink brands. There was little difference in the brain

activity when they tasted A and B. However, when the brands were

specified before tasting, the memory center of the brain was activated

and it released pleasure hormones for brand A for a majority of the

volunteers. So, the volunteers in the second experiment voted for soft

drink A.

These are most of the main factors relevant to choice blindness and are

interdependent. Further complexity arises because it is very difficult to

predict the precedence of these factors – it is practically impossible to

say that factor A is given more importance compared to factor B in

every possible scenario.

Validity of behavioral economics

As hard as it will be to believe, each psychological factor mentioned and

more are exploited by today’s market for profit. This is primarily based

on behavioral economics and appropriate extrapolation of current

trends.

As mentioned earlier, behavioral economics is not an accurate theory.

The reasons behind this will be elaborated in this section.

The issue of variance in human behavior haunts behavioral economics.

Psychological studies are conducted on a limited number of people. Its

results cannot be generalized – it is not a physics experiment where a

ball will always fall when dropped from a height under the influence of

gravity. Its results, at best, will simply indicate the “average human

behavior”. This is of very little or no use when it comes to applying the

result to the real world; it is very much possible that even if a consumer

deviates from the “average behavior” by as less as 1%, his/her decision

will be different.

Another issue is the way in which the psychological experiment is

designed. People will know that they are participating in an experiment.

They know that their answers will be evaluated by a set of human

beings – anonymous or not, they adhere to social norms. This is group

dynamics in play. Also, the smallest change or mistake in an experiment

could render the experiment invalid.

The justification offered for the statistical approximations made is that

people are generally around other people. So, most activities have at

least traces of group dynamics in them. This makes them adhere to

social norms most of the times. Also, the previous economic theory did

not take into account the irrationality of people. Although “something is

better than nothing” is not a scientifically sound argument, for practical

purposes, it seems to hold good.

Choice Blindness

Motivation to look for choice blindness

The most common methods to fool people are through illusions; who

hasn’t been stunned by an amazing magic trick before! Illusions target

people’s attention, perception and consciousness. People are diverted

to think/focus on something else while the main element of the trick is

being manipulated. When people look back at the main element, they

are amazed by the magic trick.

(Grimes, 1996), (Henderson, 1997), (Pashler, 1988) and (Rensink,

O'Regan, & Clark, 1997) managed to recreate and document this

phenomenon where people often fail to notice dramatic changes in a

visual scene following a brief interruption. This is change blindness.

(Grimes, 1996) discovered that people did not notice significant

changes made to photographs while they were diverted. (Rensink,

O'Regan, & Clark, 1997) conducted an experiment that alternates an

original and modified scene with a brief blank display. The volunteers in

the experiment took astonishingly long times to identify the changes

between the two pictures.

(Levin & Simons, Failure to detect changes to attended objects in

motion pictures, 1997) and (Levin & Simons, 1998) conducted studies

on change blindness in motion pictures and in real life. In the latter

study, a man holding a map approached random pedestrians and asks

them for directions. About a minute later, two men with a door walk

between the man and the pedestrian. The man with the map quickly

switches place with one of the men carrying the door. As the door is

removed from the pedestrian’s view, a new man is standing, holding a

map. Most pedestrian failed to notice this and continued giving

directions as if the same man were asking them for directions.

This prompted the psychologists to explore if there is a general failure

to retain and/or compare information from moment to moment.

(Johansonn, Hall, & Sikstrom, 2008) explored the impact of the changes

in visual environment on people’s actions.

There is another important phenomenon that plays an effective role in

misguiding people. Common sense implies that we know our own

actions because we caused them. This makes us believe that we are

conscious of our activities. This gives us the illusion of a path from

thought to reason to action. Hence, this misguiding phenomenon is

called introspective illusion. Psychologist Brasil-Neto used an advanced

technique to stimulate a finger movement. The subjects of the study

moved their finger and were convinced that they had decided to move

their finger. This adds a layer of mystery to the brain and scientists

haven’t managed to explain this.

The next section explores the time evolution of the economic scenario

that can be applied to almost every other country. In this case, the

development of the world has beautifully complemented the

psychological research.

A setting for choice blindness

A few decades back, in India, if a person2 went to a grocery store and

asked for bread, he or she would be given bread. However, if the same

is done today, the consumer would be bombarded with some 25

different varieties of bread. The same applies for almost every sector in

the market.

The growth of choice is becoming a big problem in many different

product categories. This has stemmed from the unanimous opposition

to monopoly3 in the market. The opposition is fueled by two simple

assumptions:

1. More choices increase the likelihood of people finding what they

want

2. People need freedom of choice – they feel better when they have

more options.

2 A buyer, in this context, is called a consumer – a buyer “consumes” products from the market 3 Just like the actual board-game Monopoly, it refers to exactly one organization seizing control of the market

It turns out that both these assumptions are true. It is essential to

factor in the impact of more choices on the mental state of a person.

First of all, the comparisons that need to be made among the different

choices increase exponentially – people don’t have the capability to

perform such complex comparisons.

Secondly, there is a potential for regret4. It is not uncommon to hear

people mumbling about the choices they make – “I wish I’d bought the

Panasonic TV instead of the LG TV”, “I wish I’d bought the Superman T-

shirt instead of the Batman T-shirt” and so on.

Thirdly, something counterintuitive can be observed – people lose

perspective of some of their requirements when they compare the

choices side by side. This was first documented by Chris Hsee (1996).

His paper talked about “joint evaluation” (side by side comparison of

choices) and “separate evaluation”.

This happens because people compare things based on a limited

number of attributes (complexity of comparison) – for a TV, say the

color reproduction of pictures on the screen. When they are intensely

paying attention to the color reproduction, they lose track of the types

of movie clips the TV can play. Essentially, a group of attributes take

4 Surprisingly, this effect was predicted by Alvin Toffler nearly 40 years ago in his book, Future Shock. He wrote, “Ironically, the people of the future may suffer not from an absence of choice, but from a paralyzing surfeit of it. They may turn out to be the victims of that peculiar super-industrial dilemma: ‘Overchoice.’”

precedence over others. This leads to a decision that doesn’t match

their original needs completely.

This is a primitive occurrence of what is called choice blindness.

Choice Blindness

Choice blindness examines the extent to which people detect when the

outcome of their choice is inconsistent with their preferences. To this

date, the exact reason for choice blindness is unknown. The puzzling

aspect of choice blindness is that people analyze the situation on

paper, give a response and then contradict themselves. It has been

hypothesized that choice blindness is concerned with the brain’s

representation of the response and the comparison of the response

with the new choice.

Lars Hall and Peter Johansson explain their study as follows:

“For example, in an early study we showed our volunteers pairs of pictures

of faces and asked them to choose the most attractive. In some trials,

immediately after they made their choice, we asked people to explain the

reasons behind their choices.

Unknown to them, we sometimes used a double-card magic trick to covertly

exchange one face for the other so they ended up with the face they did not

choose. Common sense dictates that all of us would notice such a big

change in the outcome of a choice. But the result showed that in 75 per cent

of the trials our participants were blind to the mismatch, even offering

“reasons” for their “choice”.

Importantly, the effects of choice blindness go beyond snap judgements.

Depending on what our volunteers say in response to the mismatched

outcomes of choices (whether they give short or long explanations, give

numerical rating or labelling, and so on) we found this interaction could

change their future preferences to the extent that they come to prefer the

previously rejected alternative. This gives us a rare glimpse into the

complicated dynamics of self-feedback (“I chose this, I publicly said so,

therefore I must like it”), which we suspect lies behind the formation of

many everyday preferences.”

However, choice blindness doesn’t always happen. This study has

effectively challenged the current theories of decision-making and

introspection. Psychologists have no explanation for choice blindness

till date. Their hypotheses are shaky at best.

Study

Study Design

Individual participants and participants in groups were picked. They

were randomly assigned one of the two questionnaires. They were

asked to fill a preliminary questionnaire that determined the factors

(like price, aesthetics and so on) that were of importance to them. They

were asked to fill the main questionnaire – this had cell phone/laptop

models with their specifications. They were verbally asked to justify

their reasons for picking a particular model.

A pilot study was conducted with 20 close friends (humanities course)

of the authors. The input received from them was used to improve the

parameters in the questionnaire.

Participants

The participants consisted of 17 to 22 year old college students from

Goa, Bangalore and Chennai. Each participant was designated a

number to ensure anonymity. There were totally 63 participants. 37 of

them picked the questionnaire with the laptop and the remaining

picked the questionnaire with the smartphone.

Questionnaire

The questionnaires were created and displayed on an iPad mini to

avoid clumsy data collection. Choices were recorded in a paper with a

pre-drawn response table. There were two sets of questionnaires – one

had laptop models and the other had smartphone models. Each

questionnaire had three pages. The first page consisted of the list of

parameters to be considered and their respective importance in taking

a decision. The second page consisted of two laptop/smartphone

models with their specifications. The third page consisted of two

laptop/smartphone models with one of the attributes exchanged. There

were 2 such questionnaires for the first set with different parameters

exchanged in page 3.

Procedure Every participant was informed that they were a part of a study

conducted for a report. They were assured about their anonymity. Then

the first page of the questionnaire was shown and their responses were

recorded. The second page of the questionnaire was shown and their

responses were recorded. The participants were asked about their

current laptop/smartphone – its specifications and why they wanted to

change it, if they wanted to change it. This time was utilized to display

the third page of the questionnaire instead of the second.

Then, the participants were asked to justify their choice verbally. The

factors mentioned were noted down. The participants in set 1 were

asked to do the same with the second questionnaire of the same set

(different parameters).

Once the experiment ended, the participants were debriefed about the

study. Almost all of the participants who had experienced choice

blindness expressed immense surprise and were interested to hear

about choice blindness.

Results Despite reading the papers on choice blindness, the authors didn’t have

complete faith in the experiments. Performed by (Johansonn, Hall, &

Sikstrom, 2008). The results surprisingly did indicate the presence of

choice blindness – nearly 36.24% of the participants had experienced

choice blindness. The low percentage of choice blindness as opposed to

the 60+ % in the papers mentioned in the bibliography is to do with

many participants being with groups of 4 people (maximum). Even if

the participant didn’t identify the parameter manipulation, in all the

groups, one of the group members prompted the participant. In some

cases, the participant noticed, in a very few cases the participant

assumed that the group member was pranking him/her.

Sample response #1 from a participant (Self-contradictory)

The participant had originally chosen a laptop with higher graphics and

lower memory. But when asked to justify the choice made (page 3

shown), the participant went on and justified the choice by saying that

both graphics and memory were extremely important to play computer

games. Rated memory 3, graphics 5. (page 1)

Sample response #2 from a participant

The participant had originally chosen a laptop with higher memory and

lower graphics. But when asked to justify the choice made (page 3

shown), the participant, clueless about the switch, explained that

memory was more important. Rated memory 5, graphics 4 (in page 1)

In conclusion, choice blindness is quite prevalent. If it is present in such

a high percentage in teenagers and very young adults (the most pristine

brain structure occurs around this age), then it is a reasonable to

assume that it is prevalent among the general population too.

The following are two tables showing the outcome of two

questionnaires. The manipulation condition is the swapped attribute.

Detections are the number of participants who detected the swapping.

C.B (Choice blindness) column shows the number of participants who

were choice blind.

Set 1 Questionnaire (Smartphone) with Resolution – Memory Swap

Manipulation

condition

Detections C.B* C.B

Justification

C.B Self-

contradictory

Justification

Resolution 9 7 3 4

Memory 7 14 4 8

Total 16 21 7 12 *C.B choice blindness

Set 2 Questionnaire (Laptop) with Graphics – Memory Swap

Manipulation

condition

Detections C.B* C.B

Justification

C.B Self-

contradictory

Justification

Graphics 6 7 3 4

Memory 4 9 3 6

Total 10 16 6 10 *C.B choice blindness

Discussion and Conclusion

It was observed that choice blindness occurs very rarely when a key

attribute like price is switched (pilot study). The change was immediate

noticed. But in scenarios where factors that were not the center of

attention, choice blindness could be easily observed.

Another important factor was the knowledge participants possessed.

Some of the technically aware participants identified the swap because

they knew the actual attributes of that particular product – the

participants who experienced choice blindness did not detect a change

even after the page was displayed to them.

One possible flaw in the experimental methodology is that the stakes

were not high – the participants might not have given serious while

answering such questions. However, before people buy things, they

usually give it some thought. So, applying the results of this study to

real life situations is not plausible. However, the very presence of

choice blindness is an invitation to do further research.

Choice blindness has unbridled potential. Understanding choice

blindness needs an insight into the mechanism of thinking,

representation of thoughts in the brain and so on. It is an amazing topic

for academic research.

Choice blindness could also have a tremendous impact on behavioral

economics. If the conditions leading to choice blindness are figured out,

the companies will no longer have to spend money on advertisements

to persuade people to buy their products – people can be tricked into

buying and justifying a product they originally didn’t want.

A more deeper and philosophical issue that arises is about the idea of

what people want – if people’s thoughts can be changed, then what is

the significance of an original thought?

Bibliography

Ariely, D. (2008). Predictably Irrational.

Grimes, J. (1996). On the failure to detect changes in scenes across

saccades.

Henderson, J. (1997). Transsaccadic memory and integration during

real-world object perception.

Hsee, C. K. (1996). The Evaluability Hypothesis: An Explanation for

Preference Reversals between Joint and Separate Evaluations of

Alternatives.

Iyengar, S. S., & Lepper, M. (2000). When Choice is Demotivating.

Johansonn, P., Hall, L., & Sikstrom, S. (2008). From Change Blindness to

Choice Blindness.

Levin, D. T., & Simons, D. J. (1997). Failure to detect changes to attended

objects in motion pictures.

Levin, D. T., & Simons, D. J. (1998). Failure to detect changes to people

during a real-world interaction.

Pashler, H. E. (1988). Familiarity and the detection of change in visual

displays.

Rensink, R. A., O'Regan, J. K., & Clark, J. J. (1997). To see or not to see: the

need for attention to perceive changes in scenes.

Schanzer, J. (2013). Choice Blindness in Consumer Decisions.

Toffler, A. (1970). Future Shock.

Appendix I – Sample

Questionnaires Set 1 (Smartphones)

Page 1

On a scale of 1 to 5, how important are these factors to

you, if you were to buy a smartphone?

Price 1 2 3 4 5

Display 1 2 3 4 5

Screen

Resolutio

n

1 2 3 4 5

Memory 1 2 3 4 5

Battery 1 2 3 4 5

1: Not Important, 5: Very Important

Page 2

Choice iPhone 5 Nexus 5

Price INR 43,000 INR 29,000

Display 4 inches 4.95 inches

Resolution 1136 x 640 1920 x 1080

Memory 1 GB 3 GB

Battery 1140 mAh 2330 mAh

Page 3

Choice iPhone 5 Nexus 5

Price INR 43,000 INR 29,000

Display 4 inches 4.95 inches

Resolution 1136 x 640 1920 x 1080

Memory 1 GB 3 GB

Battery 2330 mAh 1140 mAh

(in other sets, different smartphones were used)

Set 2 (Laptops)

Page 1

On a scale of 1 to 5, how important are these factors to

you, if you were to buy a laptop?

Price 1 2 3 4 5

Display 1 2 3 4 5

Screen

Resolutio

n

1 2 3 4 5

Memory 1 2 3 4 5

Battery 1 2 3 4 5

Processo

r 1 2 3 4 5

1: Not Important, 5: Very Important

Page 2

Choice Dell Alienware ASUS ROG

Price INR 149,000 INR 160,000

Display 14 inches 17 inches

Resolution 1920 x 1080 1920 x 1080

Graphics Nvidia GTX 765M Nvidia GTX 770M

Memory 24 GB 16 GB

Processor Intel Core i7 (Haswell) Intel Core i7 (Haswell)

Page 3

Choice Dell Alienware ASUS ROG

Price INR 149,000 INR 160,000

Display 14 inches 17 inches

Resolution 1920 x 1080 1920 x 1080

Graphics Nvidia GTX 770M Nvdia GTX 765M

Memory 24 GB 16 GB

Processor Intel Core i7 (Haswell) Intel Core i7 (Haswell)

Appendix II – Data Collected

In all the tables, ‘C.B’ is choice blindness.

Set 1 Questionnaire (Smartphone) with Resolution – Memory Swap (a)

Manipulation

condition

Detections C.B C.B

Justification

C.B Self-

contradictory

Justification

Resolution 9 7 3 4

Memory 7 14 4 8

Total 16 21 7 12

Set 1 Questionnaire (Smartphone) with Battery – Memory Swap (b)

Manipulation

condition

Detections C.B C.B

Justification

C.B Self-

contradictory

Justification

Battery 6 10 4 6

Memory 7 14 4 8

Total 13 24 8 14

Set 2 Questionnaire (Laptop) with Graphics – Memory Swap

Manipulation

condition

Detections C.B C.B

Justification

C.B Self-

contradictory

Justification

Graphics 6 7 3 4

Memory 4 9 3 6

Total 10 16 6 10

Choice blindness in 1(a) – 32.43 %

Choice blindness in 1 (b) – 37.84 %

Choice blindness in 2 – 38.46 %

Average choice blindness – 36.24 %