When making high-value decisions, people are quick and more accurate, suggests new research.
A new study found that when people have to pick between two high-value things, they make quick and precise selections — the exact reverse of what many scientists predicted.
People are less sensitive to fluctuations in value when the overall value of a product increases, according to researchers.
It appears that telling the difference between a $50,000 car and a $55,000 car should be more difficult than telling the difference between a $5,000 car and a $10,000 car. Despite the fact that the difference in value is the same, the fraction of the overall value in the higher priced car is significantly smaller, allegedly making it harder to notice.
“In our studies, we found just the opposite,” says Ian Krajbich, co-author of the study.
“Our results showed that in high-value decisions, people were more accurate – they were making better decisions than when they chose between low-value items. And while they could make those decisions quickly, they also slowed down and considered the options more carefully when we told them they were going to make a high-value decision.”
The theory that as the magnitude of a change rises, people become less sensitive to it has a long history in science. It’s known as the Weber-Fechner Law, declining marginal utility, or divided normalization in various fields.
It’s also intuitively correct. It’s more difficult to detect the difference between two huge weights – say, 100 lbs. and 105 lbs. – than it is to identify the difference between two light weights of 5 and 10 lbs. Similarly, determining which of two rock concerts was louder would be tough, while determining the difference in loudness between a whisper and a shout would be simple.
However, according to Krajbich, this new study reveals that people respond to value differently than they do in other domains.
In three separate computer-based investigations, Krajbich and his colleagues found that people could recognize the difference between different sorts of high-value things faster and more accurately than low-value objects in the same domain.
In one study, volunteers were asked to score their desire to eat 144 different snack foods on a scale of 0 to 10. The participants were then presented two food items and asked to choose which one they would prefer to eat at the conclusion of the trial.
Sometimes volunteers were shown two foods they rated very high (8 and 9, for example) and sometimes two foods they rated low (2 and 3, for example).
The results showed that individuals were more likely to correctly choose their higher-ranked meal (from earlier in the trial) and also chose more rapidly when the decision involved two highly rated foods rather than two low-rated snacks.
Another group of participants had similar results when they judged abstract art on a scale of 0-10. They were faster and more accurate in choosing among the paintings they ranked higher when asked which piece of art they would most like to take home, just as they were in the first experiment.
The third experiment did not rely on participants’ subjective value statements. They were presented multi-color blocks, similar to one side of a Rubik’s Cube, with hues ranging from blue to pink in this experiment. Points were assigned to the blocks, with cash values ranging from 20 cents to $2.50.
On one end of the color spectrum, the values were low, while on the other, they rose to the maximum levels.
The participants were then given many chances to choose between two blocks, just like in the preceding studies. Sometimes they were both high-value pieces, such as $2 and $2.25, while other times they were both low-value blocks, such as 25 cents and $50.
When picking between two low-value blocks, participants were faster and more accurate than when choosing between two high-value blocks.
There was one more twist to the experiments. In half of each experiment’s decisions, the researchers informed participants ahead of time whether they would be making a decision between high-value goods or low-value ones.
“The idea was that if people knew they were going to choose between two high-value options, they might be happy with either one, so they wouldn’t need to spend as much time or effort on the decision. With the low-value decisions, it might matter more that they choose the right one,” Krajbich adds.
“But again, we found the opposite. When we alerted them, people slowed down for the high-value decisions, as if they thought those were more important to get right.”
Remember that the value difference between the two high-value options was the same as the value difference between the two low-value options in these judgments. So, why do people behave differently when making high-value judgments, especially when they behave differently in other sensory domains?
“It may be that there is a factor we didn’t know about before, which is unique to value, that leads people to act differently,” Krajbich said.
“When people see valuable items, their brains may enter a heightened state of arousal and they become more engaged in their decisions. And with advanced warning, people seem to consciously slow down to make even better decisions between high-value, highly attractive options.”
Image Credit: Getty
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