The attraction effect and compromise effect are common factors when making choices in one’s daily life or in market settings. The problem under investigation was if the compromise effect with more realistic settings would still produce the same results as previous literature suggests (Huber et al., 1982; Huber & Puto, 1983; Sheng, et al., 2005; Simonson, 1989; Simonson & Tversky, 1992) and if the implementation of a “sold out” condition would be an important condition that would influence participant’s choices of products. 36 participants were divided into three groups in study 1 (set 1, set 2, set 3 of products). Similarly in the second study, a total of 88 participants were divided into three groups (dual product condition, compromise condition, and sold out condition). In study 1, the compromise effect was evident with more realistic settings. The findings of study 2 showed that in the sold out condition, participants chose the lesser quality products. The results of both studies allow marketers and consumers to strategize their decisions when buying or selling products.
Wong, Jeremy, "The Compromise Effect in Market Settings" (2012). Psychology Honors Papers. Paper 21.
The views expressed in this paper are solely those of the author.