CogLunch: Rahul Bhui "A rational account of the repulsion effect"
Description
Speaker: Rahul Bhui
Title: A rational account of the repulsion effect
Abstract: The exact same person facing the exact same stimulus can feel very differently about it depending on the context. Such context dependence can lead to anomalous preference reversals, like the recently discovered “repulsion effect” in which the presence of a strictly inferior option makes the option that dominates it seem less appealing. However, the repulsion effect is hotly debated and it is not clear when or why it occurs. In this project, we formally develop and experimentally test a normative account of the repulsion effect. Our theory is based on the idea that the true values of options are uncertain and must be inferred from available information, which includes the properties of other options. We formalize this logic using a hierarchical Bayesian cognitive model that predicts how the strength of the effect should vary with statistical properties of the context. Our results illuminate key drivers of context dependence across both economic and perceptual judgment.