Magnitude comparison revisited: an alternative approach to binary choice under uncertainty

Two generations of psychologists have been interested in understanding binary choice under uncertainty. In the 1970s and 1980s, researchers assumed that people rely on a two-stage magnitude comparison process to make these decisions (Banks, 1977; Moyer & Dumais, 1978). More recently, the focus has shifted to approaches that rely on probabilistic cues and simple heuristics (Gigerenzer & Goldstein, Psychological Review 103, 650-669, 1996). Here, we test competing predictions derived from these two very different approaches and conclude that the magnitude comparison process plays a central role in this task. In support of this conclusion, we present an experiment in which participants were timed as they decided which of two vehicles was more expensive. Pairs composed of one luxury vehicle (e.g., BMW 323i) and one nonluxury vehicle (e.g., Toyota 4Runner) were critical because the magnitude comparison approach correctly predicted that reaction times would decrease with subjective distance, whereas the heuristics approach incorrectly predicted that there would be no relation.