The impact of self-confidence on the compromise effect

Area of Science:

• Behavioral Economics
• Consumer Psychology
• Decision Science

Background:

• The compromise effect describes the tendency for consumers to choose a middle option when presented with extreme choices.
• Self-confidence, a personality trait, may influence decision-making processes and susceptibility to cognitive biases like the compromise effect.

Purpose of the Study:

• To investigate the relationship between self-confidence and the compromise effect in consumer choice.
• To determine if self-confidence levels predict a preference for or avoidance of compromise options.

Main Methods:

• Three experimental studies employing between- and within-subjects designs were conducted.
• Participants' self-confidence, risk preference, and uncertainty were measured using validated scales.
• Purchasing decisions across various product categories were analyzed.

Main Results:

• High self-confidence was associated with a reduced likelihood of choosing a compromise option, linked to decision certainty.
• Low self-confidence led to a greater propensity to select the middle option, particularly in risky scenarios.
• Both general and specific self-confidence levels were found to influence the choice of compromise options.

Conclusions:

• Self-confidence significantly moderates the compromise effect in consumer decision-making.
• Understanding self-confidence is crucial for predicting consumer behavior and susceptibility to choice architecture.
• Marketing strategies may need to consider consumer self-confidence levels when presenting product choices.