Trying Hard or Hardly Trying: An Analysis of ContextEffects in Choice DHAR, NOWLIS, SHERMANTRYING HARD OR HARDLY TRYING

Ravi DharSchool of Management

Yale University

Stephen M. NowlisCollege of Business

Arizona State University

Steven J. ShermanDepartment of Psychology

Indiana University

Several studies have shown that consumer choice is often influenced by the context or the set ofalternatives under consideration. Context effects have largely been explained in terms of con-structive preferences that are consistent with 2 theoretical accounts—effort minimization andperceptual contrast—that emphasize different underlying motivations. We propose that the ef-fect of time pressure on context effects can be used as a moderating variable to determine whichof the 2 motives is supported. Specifically, if context effects bias preferences due to effortminimization, time pressure should increase the magnitude of such effects. In contrast, if con-text effects arise due to an excessive focus on the relational characteristics of the alternativesprovided, time pressure should reduce the magnitude of such effects. We examine this proposi-tion in relation to the compromise effect and a choice between an extreme and an all-average op-tion. We find that the compromise effect and the preference for an all-average alternative areboth reduced under time pressure. A study using Mouselab provides additional support for theunderlying decision mechanisms. We discuss the theoretical implications of this research andexplore its consequences for marketers.

A major focus in the decision-making literature has been onthe problem of how people choose among a set of availablealternatives. Although the classical theory of choice as-sumes that each alternative has a utility or subjective value,and that the consumer selects the alternative with the high-est value, one of the most researched areas in behavioral de-cision theory has been the understanding of how actualchoice behavior differs from the principle of value maximi-zation (e.g., Bettman, Luce, & Payne, 1998). An implica-tion of the value maximization principle is that thepreference between alternatives is independent of the

choice context, as defined by the set of alternatives underconsideration (Simonson & Tversky, 1992).

However, a number of studies that have investigated theeffect of the choice context show a systematic effect of intro-ducing a new option on the relative preference among alterna-tives that were available all along, resulting in the violation ofpreference invariance. A number of different effects in con-sumer choice, such as the attraction and the compromise ef-fect, have been identified in the literature (e.g., Huber, Payne,& Puto, 1982; Simonson, 1989). An underlying theme ofthese findings is that consumer preferences are often uncer-tain and are constructed in the generation of a response to achoice task (Slovic, 1995).

The manner in which preferences are constructed can beunderstood in terms of two alternative frameworks. Accord-ing to the effort–accuracy framework, consumers select

JOURNAL OF CONSUMER PSYCHOLOGY,9(4), 189–200Copyright © 2000, Lawrence Erlbaum Associates, Inc.

Requests for reprints should be sent to Steven J. Sherman, Department ofPsychology, Indiana University, Bloomington, IN 47405–1301. E-mail:sherman@indiana.edu

among diverse decision strategies by making a trade-off be-tween the desire to make an accurate decision and the desireto minimize effort. Thus, task- or context-related changes thatalter the amount of effort required to make the best possiblechoice can result in a change in strategy selection and poten-tially inconsistent outcomes. For example, studies of the ef-fect of the number of items in the choice set show that anincrease in the number of alternatives facing consumers leadsto a greater use of noncompensatory strategies (Johnson &Meyer, 1984; Payne, 1976).

An alternative viewpoint of preference construction basedon the perceptual framework depicts consumers as focusingon certain aspects of the alternatives that are particularly sa-lient in the decision task (Simonson & Tversky, 1992). Spe-cifically, consumers seem to focus on the value of an option inrelation to the other options in the choice set. An implicit as-sumption of this framework is that participants are workinghard to identify the best possible choice, but do so by focusingon relational characteristics of the alternatives at the expenseof absolute characteristics of the option. For example, accord-ing to Simonson and Tversky (1992), participants tend to fo-cus on the comparative aspects of the choice alternatives, andthis adds complications to the decision process that renderthem vulnerable to context effects. By focusing on relative at-tribute values, participants give heavy weight to localtrade-offs and ignore more absolute or global assessments,which could reduce context effects in judgment. According tothis view, different contexts highlight different localtrade-offs, alter the degree of attention to local versus globalaspects, and thus have an impact on the degree of decision dif-ficulty, often giving rise to inconsistent decisions (Shafir,1993). In summary, the existence of context effects in choicecan be attributed to construction of preferences caused by (a)the shift in decision strategies based on considerations of ef-fort–accuracy trade-offs or (b) the amount of focus on makingeffortful compensatory trade-offs and relative aspects of thealternatives at the expense of more global evaluation. Thus,context effects are consistent with choice simplification dueto changes in decision complexity or due to an attempt atmaking compensatory comparisons among the alternativesprovided. An obvious question that arises is, “Which of thesetwo accounts best captures the decision processes that under-lie context effects?”

Although context effects might be compatible with eitheraccount, this article distinguishes between them by examin-ing the effect of time pressure on context effects. If context ef-fects arise due to effort minimization, the effort–accuracyframework suggests that, as a full analysis of options be-comes even more difficult due to time pressure, the tendencytoward simplification should increase the susceptibility tocontext effects. In contrast, if context effects arise due to thedifficulty of making compensatory comparisons among therelative characteristics of the options, consumers under timepressure are likely to make fewer compensatory compari-sons, rendering them somewhat less susceptible to context ef-

fects. In addition to a lesser consideration of the relativetrade-offs, the greater adoption of lexicographic decisionstrategies under time pressure (e.g., Payne, Bettman, & John-son, 1988) should reduce context effects that result in ex-tremeness aversion or the preference of a compromise option.Thus, the two accounts for the construction of preferencesmake opposite predictions about the effect of time pressureon the magnitude of context effects.

In addition to understanding how context effects in choicechange under time pressure, we also investigate the decisionprocesses underlying context effects. Moreover, a consider-ation of the two accounts for constructive preferences canhelp us understand which consumers are more susceptible tocontext effects. For example, if context effects arise due touse of effort minimizing heuristic, it suggests that low-in-volvement consumers are more susceptible to context effects.Alternatively, according to the perceptual framework, in-volved consumers who rely on comparative aspects and care-fully attempt to balance local trade-offs may be more prone tocontext effects.

This article reviews previous research relevant to the areaand tests the effect of time pressure on the relative prefer-ence among alternatives in the domain of two well-estab-lished context effects: the compromise effect and the choiceof an “all-average” option in relation to an enriched option.Two experiments were conducted that imply that the partici-pants who make compensatory comparisons among the al-ternatives provided are more likely to have a preference for acompromise and an “all-average” option. As a consequence,the studies show that the size of the compromise effect de-creases under time pressure and that the preference for theall-average option decreases under time pressure. UsingMouselab, we also examined the decision processes under-lying the effect of time pressure on the construction of pref-erences. We report the findings and conclude with adiscussion of their implications for marketers as well as sug-gestions for future research.

THE PREFERENCE FOR ACOMPROMISE OPTION

An underlying notion of a good decision rests on the case thatthis decision will be consistent across different situations.The failure of preferences to be consistent across differentchoice contexts results in the violation of value maximiza-tion. One phenomenon that demonstrates such a violation isthe compromise effect, which refers to the finding that, withinan offered set, options with extreme values are relatively lessattractive than options with intermediate values (Simonson,1989). For example, consider two-dimensional optionsx, y,andz,such thaty lies betweenx andz.According to the com-promise effect, the addition ofx to {y, z} increases the share ofy relative toz.This pattern of results, under certain plausibleconditions, violates the principle of value maximization.

190 DHAR, NOWLIS, SHERMAN

Value maximization predicts that, in opposition to the com-promise effect,y should lose relatively more market sharethanzfrom the introduction ofxbecausey is closer tox than isz (Tversky & Simonson, 1993).

The explanation for the compromise effect implicitly sug-gests that the choice of an intermediate alternative is a strat-egy that is employed to avoid selecting among extremeattribute values (Simonson & Tversky, 1992). Accordingly,the selection of a compromise option can be viewed as an at-tempt at using an effort minimizing heuristic due to an in-crease in choice complexity when the two-option choice set isenlarged by adding a new alternative to the choice set.Alternatively, the selection of a compromise option might bea result of taking into account local, relative characteristics ofthe alternatives in the choice set. This would imply that re-spondents who are more likely to attempt compensatorytrade-off comparisons find the choice more difficult and aremore likely to exhibit the compromise effect (Dhar, 1996).The two accounts thus differ in the source of the context effectwhen a new option is introduced—either due to choice sim-plification or due to an excessive consideration about the rela-tive trade-offs among the alternatives.

One way in which these two alternative accounts can bedistinguished is by examining the actual decision processesfor consumers who select the compromise option. Simonson(1989), using think aloud protocols, showed that decisionprotocols of participants who selected the compromise optionwere longer than those of participants who chose the extremeoptions. An alternate way of testing between these competingexplanations is by predicting the effect of a new variable onthe compromise effect. We propose that the two accountsmake opposite predictions about the effect of time pressureon the compromise effect. First, consider the preference forthe option that is seen as intermediate when a more extreme,new alternative is added. If enlarging the choice set is seen asincreasing choice complexity, the selection of a compromiseoption could be viewed as an attempt by effort-minimizingindividuals at simplifying the increase in complexity of thedecision problem. This suggests that increased time con-straint serves to further restrict cognitive processing (e.g., seeEdland & Svenson, 1993), resulting in a greater number of re-spondents resorting to a simplifying heuristic of selecting themiddle alternative. Thus, if the choice of the compromise op-tion can be attributed to an attempt at simplification when thechoice set is enlarged, time pressure should increase the like-lihood of selecting the compromise option.

Alternatively, if the selection of a middle alternative is aconsequence of the difficulty in making extreme trade-offs inthe process of compensatory comparisons among the alterna-tives provided, those under time pressure might be less likelyto engage in compensatory trade-offs among the options pro-vided and thus be less likely to choose the middle option.Within this framework, the change in decision processes un-der time constraints suggests two reasons why the compro-mise effect will weaken under time pressure. First, consumers

under time pressure are more likely to use noncompensatorydecision rules (Payne et al., 1988), which makes the choiceeasier compared to decisions rules that attempt to make diffi-cult trade-offs. To the extent that making difficult compensa-tory comparisons favors a compromise alternative (Dhar &Simonson, 1998), a reduction in the likelihood of engaging insuch comparison processes should weaken this effect. Sec-ond, the use of noncompensatory rules is less likely to favorthe selection of an alternative that is not the best on any singleattribute. For example, rules that increase in use under timepressure such as the lexicographic or the Max rules (e.g.,Svenson, Edland, & Slovic, 1990) favor extreme options thatexcel on the most important attribute. Because these rules aremore likely to be used under time pressure, it again argues fora reduction in the magnitude of the compromise effect.

The first study investigates whether time pressure increasesor decreases the compromise effect—that is, whether the pref-erence for the middle option is increased or decreased whenparticipants are limited in the amount of time available to makechoices. As outlined earlier, the choice simplification accountpredicts an increase due to the use of simplifying decisionrules. On the other hand, the perceptual account predicts a de-crease in preference for the middle option due to an increase inthe use of noncompensatory trade-off comparisons as opposedto compensatory comparison among the alternatives.

STUDY 1: CHOICE OF A COMPROMISEOPTION

Method

Participants were 250 undergraduate marketing students ful-filling a course requirement. Respondents made choices in sev-eral different product categories. Two factors were manipu-lated in a 2 × 2(Decisions Either Made With or Without TimePressure × Either Two or Three Options in the Choice Set) be-tween-subjects design. Participants in the time pressure condi-tion were given a maximum of 15 sec per choice problem,whereas those in the other condition were given an unlimitedamount of time. Time pressure was manipulated in a group set-ting (there were small groups of about 20 participants) by tell-ing the respondents in the time pressure conditions that theyhad a certain amount of time to complete each decision. Wethen marked on the board each 5-sec increment, until the 15 secwere completed, and participants were told there was no moretime and they had to move onto the next problem, where we re-peated the procedure. Other research has also used such amethod (e.g., Dhar & Nowlis, 1999; Stiensmeier-Pelster &Schurmann, 1993; Svenson & Benson, 1993; Verplanken,1993). As a manipulation check, following Edland (1994), re-spondents were asked after completing all problems, “Howmuch time pressure did you feel when making your choices?,”with responses on a 9-point scale ranging from 1 (no pressure)to 9 (very much pressure). Respondents were also asked, “How

TRYING HARD OR HARDLY TRYING 191

fast did you need to make your decisions,” with responses on a9-point scale ranging from 1 (not at all fast) to 9 (very fast). InStudy 2, time pressure was manipulated in a similar manner,and the same manipulation checks were assessed.

The choice set consisted of either (a) a middle-performance,middle-price option and a low-performance, low-price option or(b) these two options plus a high-performance, high-price op-tion. For instance, in the product category of tires, one conditionconsisted of a choice set with “Option A” offering a warranty of40,000 miles and a price of $64 and “Option B” with a warrantyof 25,000 miles and a price of $45. The other choice set includedthese two options plus another one that had a warranty of 55,000miles and a price of $83. Thus, “Option A” (in the two-optionset) became the middle alternative in the choice set that offeredall three alternatives. Respondents made choices in the productcategories of tires, binoculars, and computers. As with tires, theoptions in other categories also differed along the two major di-mensions of performance and price.

Results

Across the two time pressure conditions, the share of the mid-dle option in the two-option set was tested against the share ofthe middle option in relation to the low-performance option inthe three-option set (Simonson & Tversky, 1992). For in-stance, in the product category of binoculars, the middle per-formance brand was chosen by 71% of respondents in thetwo-option set when there was no time pressure (see Table 1).When this set was expanded to three options, the relativeshare of the middle brand compared to the low-performancebrand increased to 81% (.46 / (.46 + .11)). Thus, in this case,without time pressure, the relative share of the middle brandincreased in the three-option set, consistent with the compro-mise effect. Averaged across the three categories, the magni-tude of the compromise effect without time pressure was .10((.42/.42+.11) – .69). However, when there was time pres-

sure, the compromise option was less preferred in thethree-option set, by .15 (77% vs. 62%). Therefore, the magni-tude of the compromise effect diminished by .25 (.10 + .15)compared to the no time pressure condition, and this differ-ence was highly significant,t(747) = 4.9,p < .01. In all threeproduct categories, the magnitude of the compromise effectdiminished under time pressure. Finally, the manipulationchecks were averaged (α = .93) together and showed that, asexpected, participants felt more time pressure when they hadless time to make their decisions (6.6 vs. 3.6,p < .01). In thesecond study, the same manipulation checks showed that re-spondents felt more time pressure in the condition in whichthere was less time to make choices (p < .01).

The first study thus finds that time pressure decreases thecompromise effect, as the relative attractiveness of the optionwith intermediate values is diminished. The results are consis-tent with an account that consumers who attempt to determinethe best choice by focusing on compensatory comparisonsamong the alternatives are more likely to select the compromiseoption. Consequently, the shift to a more noncompensatory de-cision processing under time pressure results in fewer compen-satory comparisons and a lower likelihood of selecting themiddle option. Note that if the choice of the middle option in athree-option choice set was due to a desire to simplify or mini-mize effort, this would suggest that time pressure should in-crease the size of the compromise effect.

More generally, the first study suggests that the bias in favorof specific options arises not because participants are simplify-ing (i.e., making too few comparisons), but rather because theyare making too many comparisons. Although the study focusedon the effect of introducing a new option on relative prefer-ences among alternatives that were available all along, ourframework can be extended to consider shifts in relative prefer-ence even when no new alternatives are introduced. In particu-lar, we focus on a choice set with one option that offerssignificant advantages on some dimensions and disadvantages

192 DHAR, NOWLIS, SHERMAN

TABLE 1Study 1: Effect of Time Pressure on Choice of a Compromise Option

Unlimited Time Time Pressure

Product Category Options in the Set (Performance and Price) Set 1 Set 2 Set 1 Set 2

Binoculars High 44 61Middle 71 46 83 25Low 29 11 17 16

Computers High 49 56Middle 58 38 66 26Low 42 13 34 18

Tires High 49 57Middle 79 41 81 29Low 21 10 19 14

Totals High 47 58Middle 69 42 77 26Low 31 11 23 16

Note. Share of respondents (N = 250) choosing each option is shown in percentages.

on others, and another option that has average values on all di-mensions, or an “all-average” option (these were referred to asenriched and impoverished options, respectively, by Shafir,1993). Thus, this choice set is such that an all-average option isintermediate in terms of its valence on the features that aremore extreme in the enriched option, and therefore the featuresof the enriched options can be viewed as an extreme option andthe all-average option as a compromise option. Consistent withthis assumption, Simonson and Nowlis (2000) showed that theall-average option is viewed as a safer choice and is more likelyto be selected by participants who expect their decisions to beevaluated. Note that these are participants who may expendmore effort in comparing the alternatives (of course, theymight potentially differ on other dimensions from participantswho do not expect to be evaluated).

If the preference for the “all-average” option is partly a con-sequence of resolving the difficulty in making compensatorytrade-off comparisons between the two items, time pressureshould again reduce the choice difficulty by unequally weight-ing such relational characteristics. The relative share of the twooptions should depend, however, on which features of the op-tions receive the most weight under time pressure. If time pres-sure increases the focus on the negative features, thepercentage of participants selecting the all-average optionshould increase under time pressure because of the extremenegative features of the enriched option. However, if time pres-sure increases the focus on the positive features, the percentageof participants selecting the all-average option should decreaseunder time pressure because of the extreme positive features ofthe enriched option. Some previous work suggests that nega-tive features are generally more salient and attention-grabbingthan positive features (Pratto & John, 1991; Wright, 1974). Onthe other hand, more recent studies on riskless choice find sup-port for greater attention to positive features under time pres-sure (Edland, 1993; Svenson et al., 1990). As opposed to theperceptual account, the effort minimization account mightsimply predict an increase in the choice of the all-average op-tion under time pressure as the “easy way out.” Study 2 is de-signed to examine the extent to which the market share of theall-average option increases or decreases under time pressure.Study 3 examines the effect of time pressure on both the com-promise effect and the choice of all-average versus enrichedoptions in order to examine the decision processes involved inthe results of the first two studies.

STUDY 2: CHOICE OF AN“ALL-AVERAGE” OPTION

Method

Participants were 124 undergraduate marketing students ful-filling a course requirement. As in Study 1, time pressure wasmanipulated between participants. Participants in the timepressure condition were given a maximum of 12 sec perchoice problem, whereas those in the other condition were

given an unlimited amount of time. Respondents chose be-tween an option that offered average features and an enrichedoption that offered both positive and negative extreme valueson each of these features (see Figure 1). For example, “Res-taurant A” offered “High Quality (4 stars); Long Wait (25minutes); Wide Selection; Dull Atmosphere,” whereas “Res-taurant B” offered “Average Quality (2.5 stars); AverageWait (10 minutes); Average Selection; Average Atmo-sphere.” Respondents made choices in the product categoriesof personal computers, restaurants, and calculators.

Results

The share of the all-average alternative decreased under timepressure. For example, in the product category of restaurants,75% of respondents chose the all-average option when therewas unlimited time to decide. When time pressure was in-duced, only 61% of participants selected the all-average op-tion. Thus, in this category, time pressure reduced the choice ofthe all-average option by 14%. Averaged across all three prod-uct categories, the choice of the all-average option decreasedby 17% when decisions were made with a limited amount oftime (Table 2). A binary logit model (e.g., Dhar, Nowlis, &Sherman, 1999; Dhar & Sherman, 1996) was conducted acrossthe three categories. The dependent variable was whether theall-average option was chosen and was a function of (a) timepressure and (b) the two-way interactions between the timepressure manipulation and the three product categories. Con-sistent with an increase in noncompensatory processing and afocus on positive feature under time pressure, there was a maineffect of time pressure on the choice of the all-average alterna-tive,χ2(1,N = 372) = 8.29,p < .01, such that time pressure re-

TRYING HARD OR HARDLY TRYING 193

FIGURE 1 Example product category from Study 2.

duced the attractiveness of the all-average option. The resultsalso support the premise that the all-average option was morelikely to be selected by individuals who focused on compensa-tory trade-offs among the relational characteristics of the op-tions under consideration rather than by individuals who wereattempting to reduce cognitive effort.

The results of the first two studies support the excessive fo-cus on local trade-offs account rather than the choice simplifi-cation account of context effects. However, these studies hadseveral limitations. First, although utmost care was taken to en-sure that participants followed the instructions about theamount of time to be spent on each problem, we cannot statewith certainty that participants followed the instructions ex-actly as described because the tasks were conducted using a pa-per-and-pencil questionnaire. Second, although the results areconsistent with the proposed shift in more noncompensatorytrade-off comparisons under time pressure, we did not directlyobserve the processing strategies that were used by the partici-pants. One advantage of observing the process data is that anychanges in strategy can then be used to perform a mediationaltest for the proposed differences in the choices. Implicit in ouranalysis is the notion that compensatory decision processes oflocal comparisons make choices difficult and that such pro-cessing differences generally result in an increase in the attrac-tiveness of compromise and all-average options. Study 3 usesthe Mouselab program (Johnson, Payne, Schkade, & Bettman,1993) to measure the processing changes and to replicate andextend the results of the first two studies. In sum, we predictthat, as in the first study, time pressure should reduce the com-promise effect. In addition, the degree of compensatory deci-sion processing should mediate the effect of time pressure onthe compromise effect. Finally, consistent with the results ofthe second study, consumers should make fewer compensatorycomparisons and pay more attention to positive features thannegative features when deciding under time pressure.

STUDY 3: DECISION PROCESSESUNDERLYING CONTEXT EFFECTS

Method

Study 3 has a number of purposes. First, we wanted to beable to replicate the results from the first study using a

more controlled Mouselab methodology. Second, wewanted to show that the results from Study 1 could be ex-plained in terms of systematic changes in decision strategy.In particular, we predicted that the use of less effortful,noncompensatory strategies would mediate the effect oftime pressure on the choice of a compromise alternative. Inaddition, we wanted to test whether participants would fo-cus more on positive features when choosing under timepressure, which would provide process support for the re-sults obtained in the second study.

Participants in this study were 139 undergraduate market-ing students fulfilling a course requirement. Each participantmade choices in four product categories, two of which weredesigned to test the compromise effect (binoculars and porta-ble barbecue grills), and two of which were designed to testthe choice of an all-average option (portable computers andcalculators; see Figure 2 for an example). Time pressure wasmanipulated between participants across the four tested cate-gories. Thus, one group of participants made four choices(one in each of the four product categories) all under timepressure. Another group made the same choices but with un-limited time. We first describe the procedure used to test thecompromise effect, and then we describe the procedure usedto test the choice of an all-average option.

For the two categories testing the compromise effect, par-ticipants in the time pressure condition were given a maxi-mum of 15 sec, as in Study 1. Each of the alternatives wasdescribed on a number of different features. For example, theportable barbecue grills were described in terms of the fol-lowing features: cooking area, weight, ease of use ratings, anddurability ratings. Participants chose between either Grill Aand Grill B, or these grills and Grill C. Grill A offered a cook-ing area of 300 square in., weight of 6 pounds, ease of use rat-ing of 80, and durability rating of 94. The ratings weredescribed as coming fromConsumer Reportsand were on ascale from 0 to 100. Grill B offered a cooking area of 380square in., weight of 10 pounds, ease of use rating of 86, anddurability rating of 89. Grill C offered a cooking area of 460square in., weight of 14 pounds, ease of use rating of 92, anddurability rating of 84. Thus, the addition of Grill C rendersGrill B the intermediate option on all dimensions.

For the two categories used to test the choice of an all-av-erage option, participants in the time pressure conditionwere given a maximum of 12 sec, as in Study 2. UnlikeStudy 2, however, participants were now asked to indicatewhich of the two options (the enriched or the all-averageitem) they would not choose. We wanted to determinewhether framing the decision task as “not choose” would in-crease the market share of the all-average option because ofthe relative salience of the extreme negative features of theenriched option. On the other hand, if a noncompensatorystrategy involves a predominant focus on the positive fea-tures of the alternatives, then we should still observe a re-duction in the market share of the all-average option undertime pressure. This possibility is, in fact, suggested by

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TABLE 2Study 2: Effect of Time Pressure on Choice of an

All-Average Option

Product Category Unlimited Time Time Pressure

Portable computer 75 50Restaurant 75 61Calculator 79 67Total 76 59

Note. Share of respondents (N = 124) choosing the all-average option isshown in percentages.

Svenson et al. (1990), who found that positive aspects gainin importance under time pressure. They suggested that par-ticipants under time pressure or cognitive resource limita-tions employ a “Max” rule in which the alternative that isbest on certain attributes is chosen. Thus, participantschoosing between calculators were asked, “Which calcula-tor would you NOT choose?” The two alternatives in eachcategory were described on several features. For example,the calculators were described along the following four di-mensions: reliability, number of function keys, sturdiness,and price. Calculator A offered high reliability, few functionkeys, very sturdy design, and a high price. Calculator B of-fered average reliability, average number of function keys,average sturdiness, and an average price.

The experiment was conducted using the Mouselab pro-gram (Johnson et al., 1993), a computer-based process trac-ing technique. Information was displayed in closed boxespresented in an Option × Attribute matrix, where partici-

pants could reveal the information in each box by moving amouse-controlled cursor to the relevant box. Mouselab re-corded which boxes were opened, in what sequence, andhow much time was spent in each box. Participants beganthe experiment with instructions on how to access informa-tion in the boxes by using the mouse. They then completed apractice problem before making decisions in each of the fourcategories. For those in the time pressure condition, a smallcircle appeared on the screen and ticked down as the timeavailable was reduced. If participants did not make a choicebefore the time was used, the program beeped, instructedthem to “please make a choice or indicate a value,” andwould not allow them to open any more boxes. Finally, afterall choices were made, participants were asked as a manipu-lation check, “How much time pressure did you feel whenmaking decisions?,” and responded on a scale ranging from0 (no time pressure) to 10 (great time pressure; e.g., Dhar &Nowlis, 1999).

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FIGURE 2 Example product category from Study 3.

As with other time pressure research that has usedMouselab (e.g., Payne et al., 1988), we calculated various mea-sures that can provide evidence of the degree to which partici-pants use noncompensatory or compensatory processingstrategies. First, we calculated the number of acquisitions ofeach piece of information, referred to as ACQ. Second, wemeasured the average time spent acquiring each piece of infor-mation, known as TPERACQ. Third, we calculated the vari-ance in the proportion of time spent on each attribute, referredto as VAR. Finally, we calculated the relative degree to whichparticipants made attribute or alternative-based transitions. Forexample, if a participant first checked the cooking area of onegrill and then the cooking area of the other grill, this would becoded as an attribute-based transition, but if they first checkedthe cooking area of one grill and then the weight of that samegrill, this would be coded as an alternative-based transition.The measure we used is the number of alternative-based transi-tion minus the number of attribute-based transitions divided bythe total number of alternative-based and attribute-based tran-sitions combined, known as PATTERN (see, e.g., Payne,1976; Payne et al., 1988). PATTERN can range from +1.0 to–1.0, with more negative values representing more attrib-ute-based processing. Prior research has found that, under timepressure, there are (a) fewer ACQ, (b) reduced TPERACQ, (c)greater VAR, and (d) a more negative PATTERN (e.g., Payneet al., 1988). We expect to replicate these results to show thatprocessing indeed was following more of a noncompensatoryprocess under time pressure.

However, of more importance to this article is to showthrough a mediation analysis that the greater use ofnoncompensatory local comparisons under time pressure isindeed what might be driving the results. In particular, toshow mediation, we must demonstrate three relations(Baron & Kenny, 1986). First, we must show that the inde-pendent variable, time pressure, significantly affects themediator, the measure of noncompensatory processing.Second, we must show that the processing measure signifi-cantly affects the dependent variable, choice of the compro-mise option. Third, we must show that the effect of timepressure on choice of the compromise option is reduced oreliminated if the processing measure is also included.

Results Pertaining to the Choice of aCompromise Option

Choice results. We first examined the results relatingto the choice of the compromise option. Consistent with theresults from Study 1, respondents were less likely to choosethe compromise option under time pressure. Averaged acrossthe two tested categories, without time pressure the choice ofthe compromise option increased by 23%. However, withtime pressure, the choice of the compromise option increasedby only 4%. The difference between these two effects is sig-nificant,χ2(1,N= 278) = 4.35,p< .05. The results were in theexpected direction for both categories.

Processing results. We next examined the processmeasures (see Table 3). As expected, participants acquiredfewer pieces of information (ACQ) when making decisionsunder time pressure (M = 18.1,M = 14.5),F(1, 276) = 20.0,p<.001. In addition, they spent less time per each acquisition(TPERACQ) when making decisions under time pressure (M =1.31,M = 1.04),F(1, 276) = 38.3,p< .001. Furthermore, as ex-pected, there was a greater degree of attribute-based processing(PATTERN) under time pressure (M = –.304,M = –.178),F(1,276) = 8.5,p < .01. These results are consistent with other re-search on time pressure (Payne et al., 1988). Finally, in terms ofthe variance spent examining each attribute (VAR), there wasgreater variance under time pressure, although this result wasnot significant (M = .024,M = .021),F(1, 276) = .77,p> .40.

Our framework suggests that choice under time pressure willresult in increased noncompensatory processing, which in turnwill result indecreasedpreference for thecompromisealternative.We completed the mediation analysis, using PATTERN, whichhas previously been shown to vary with the mode of processing(e.g., Payne et al., 1988). As mentioned earlier, we found thatPATTERNwassignificantlyaffectedby timepressure, satisfyingthe firstcriteria formediation.Next,we found thatPATTERNhasa marginally significant relation on choice of the compromise al-ternative,χ2(1,N = 278) = 2.99,p < .10, which partially satisfiesthesecondcriteria formediation.Finally, the thirdcriterionofme-diation receivessupport,as theeffectof timepressureonchoiceofthe compromise option is weaker when PATTERN is included asa variable,χ2(1,N= 278) = 2.23,p> .10; versusχ2(1,N= 278) =4.35,p< .05, as mentioned earlier. Thus, consistent with our pre-diction, this analysis shows that PATTERN mediates the effect oftime pressure on choice of the compromise alternative. Overall,the results support the notion that the preference for the compro-mise option is greater among participants who are making morecompensatory comparisons rather than avoiding the effort re-quired in making the choice.

Results Pertaining to the Choice of anAll-Average Option

We next examined the results relating to the choice of anall-average option. Averaged across the two tested catego-ries, participants were less likely to choose the average al-

196 DHAR, NOWLIS, SHERMAN

TABLE 3Study 3: Decision Processes Involved in Choiceof a Compromise Option Under Time Pressure

Dependent Measure No Time Pressure Time Pressure

ACQ 18.1 14.5TPERACQ 1.31 1.04VARIANCE 0.021 0.024PATTERN –0.178 –0.304

Note. ACQ = number of information boxes opened; TPERACQ = timeper information acquisition; VARIANCE = variance in the proportion oftime spent on each attribute; PATTERN = index reflecting degree of attrib-ute-based (–) and alternative-based (+) processing.

ternative when choosing under time pressure. Withouttime pressure, the average alternative was selected by 60%of the participants. With time pressure, however, the aver-age alternative was selected by only 41% of participants.The results were in the expected direction in both catego-ries. We tested this effect in the same manner as in Study 2and found the effect to be significant,χ2(1,N= 278) = 5.12,p < .01.

We next investigated the ratio of positive to negativefeatures that were examined. To do this, we constructed avalue for each participant that was the number of positivefeatures examined minus the number of negative featuresexamined divided by the total number of positive and nega-tive features examined, which has been referred to as VAL(Dhar et al., 1999). This value is similar in style to PAT-TERN. The value of VAL can range from +1.0 to –1.0, withpositive numbers indicating a greater focus on positive fea-tures and negative numbers indicating a greater focus onnegative features. An analysis of variance model was thenconstructed with this ratio as the dependent measure andwith the time pressure manipulation as the independentvariable. Consistent with our results, consumers focusedmore on positive features than negative features when de-ciding under time pressure (M = .024 vs. –.039),F(1, 276)= 4.66,p < .05. Although this is inconsistent with someprior work on time pressure, it is supported by other recentfindings. We speculate further in the discussion section onwhy this might be the case.

GENERAL DISCUSSION

The goal of this article was to improve our understanding ofthe consumer psychology that underlies the effect of choicecontext on the relative preference among alternatives. Be-cause effects of choice context violate the assumptions of ra-tional choice such as the principle of value maximization, it isobviously important to understand the psychological princi-ples and mechanisms that drive these effects. Researchershave identified two alternative frameworks to explain themanner in which preferences are constructed. The first ofthese is the effort–accuracy approach, which proposes thatconsumers select decision strategies by making a trade-offbetween the accuracy of the decision and the desire to mini-mize effort. The specific context, including the number andthe features of the available alternatives, can alter the strategyfrom one of careful and systematic processing of informationto one of greater simplification, thereby affecting the choiceoutcome. The second approach assumes that, although con-sumers typically work hard to arrive at the best possible deci-sion, they often focus on local comparative aspects of the al-ternatives, and this adds difficulty and complication to thechoice, as more global assessments of the alternatives are ig-nored. Specifically, changes in the choice context can alter

the local comparisons, and in so doing can alter the outcomeof the choice process.

To test these two alternative accounts underlying contexteffects, the effects of time pressure on choices were exam-ined. The two accounts make quite different predictionsabout the consequences of time pressure. Based on the no-tion of choice simplification, with no time pressure, partici-pants are less likely to engage in a careful and completeanalysis of the available options in the three-option choiceset as the choice complexity increases. According to the ef-fort–accuracy framework, with limited time for analysis,they should expend even less effort and be even more likelyto adopt simple heuristics to minimize effort. This change instrategy should result in greater likelihood of certain contexteffects. On the other hand, the comparative focus approachsuggests that, without time pressure, consumers who focusprimarily on salient local features and make more compen-satory comparisons should be more susceptible to particularcontext effects. With time pressure, however, less focus willbe put on carefully weighing the comparative information,greater attention will be given to the more global assess-ments, noncompensatory strategies will be adopted, andparticipants will thus be less susceptible to traditional con-text effects.

Two well-documented context effects, the compromise ef-fect and the tendency to choose all-average as opposed to en-riched options, were examined in three experiments. Theresults supported the perceptual account. It appears that, undertime pressure, consumers give less weight to local, salient,comparative features, and, in addition, they also focus moreheavily on the positive aspects of the alternatives. This led to areduction (and even a reversal) of the compromise effect and toa reduced tendency to choose an all-average option rather thanan enriched option. Importantly, Study 3 presented processdata to support both the mediation of simplifying,noncompensatory strategies for the effects of time pressure onthe compromise effect as well as the additional focus on posi-tive aspects of the alternatives under time pressure.

Theoretical Implications

It is important to note that, although time pressure reducesthese context effects, we are not claiming that time pressuremakes one a more accurate judge or a better decision maker.For example, in Study 1, without time pressure, there is astrong tendency to choose the compromise alternative when athird item is added to the set. This tendency for the addition ofa new alternative to change the relative preference for theother two alternatives might be considered a bias in judgment.With time pressure, this tendency to favor the compromisecandidate disappears. What we see, however, is now a ten-dency to reduce the relative market share of the compromisecandidate. This is just as much a judgmental bias. Thus, thepurpose of these experiments was not to determine whethertime pressure makes one a better or worse decision maker, but

TRYING HARD OR HARDLY TRYING 197

rather to help understand the psychological processes andmechanisms through which context effects ordinarily occur.

However, it is interesting to discuss, in the context of ourfindings, the general issue of the effects of time pressure onthe quality of decision making. The typical “common sense”bounded rationality view of time pressure (or similar manipu-lations such as cognitive busyness) is that this manipulationwill lead to more “quick and dirty” decisions and thus will re-duce the accuracy of such decisions. The reality appears to bemore complex. It is fair to say that having more time and re-sources for a choice, even when a consumer is highly moti-vated to do a comprehensive and effective analysis, does notalways produce better decisions. Such a conclusion is, in fact,consistent with several related findings in the literature. Forexample, one might think that doing a reasoning analysis or acareful introspection about why particular items are likedcould only improve decision making and lead to the expres-sion of attitudes that are more predictive of subsequent be-havior. Wilson and his colleagues reported, across manyexperiments, that reasoning and introspection actually reducethe level of attitude-behavior consistency (Wilson, Dunn,Kraft, & Lisle, 1989) and lead to decisions that are less satis-fying and less optimal (Wilson & Schooler, 1991).

Similarly, Schooler and his colleagues (Dodson, Johnson,& Schooler, 1997; Schooler & Engstler-Schooler, 1990) askedparticipants to think carefully about and to try to accurately de-scribe objects that they had recently seen, such as a color chipor a person who committed a staged crime. Surely devotingmore time and resources to analyzing what one has just seenwould improve subsequent recognition of the objects. Again,exactly the opposite was found. Participants who had to do therecognition task without any previous analysis or descriptionof the objects were far more accurate in their recognition. Infact, the only way to eliminate the poor performance of partici-pants who had engaged in introspection and reasoning was toforce them to do the recognition task under time pressure.Other recent work also supports the idea that increases in pro-cessing effort can reduce decision quality. Tetlock and his col-leagues demonstrated that increases in accountability lead togreater processing effort, while at the same time leading to in-creases in judgmental biases such as the dilution effect(Tetlock & Boettger, 1989) and the status quo bias (Tetlock &Boettger, 1994). Similarly, work by Buehler (Buehler, Griffin,& MacDonald, 1997; Buehler, Griffin, & Ross, 1994) showedthat an increase in processing effort can increase proneness tothe planning fallacy.

Schooler and Engstler-Schooler (1990) interpreted theireffects as due to the fact that reasoning changes what is basi-cally a visual process (recognizing a color or a face) into averbal process. Any time we try to think in verbal terms aboutthings that are nonverbal in nature, we will interfere with ourability to accurately recognize them. Preferences, too, mightbe considered to a large extent nonverbal (Zajonc, 1980). Byverbalizing about preferences, we might obscure the basi-cally affective nature of preferences and make decisions that

are suboptimal and unsatisfying. Without time pressure,comparative aspects are the focus of attention, and such care-ful local trade-off comparisons might obscure the moreglobal assessments and less verbalizable aspects of the alter-natives that in fact are more important to the choice.

Just as having greater time and more cognitive resources isnot always good for accurate and satisfying decision making,it might also be true that having less time for decisions mightnot always be bad. Recent work by Sherman, Lee, Bessenoff,and Frost (1998) investigated the effects of limited cognitiveresources on the stereotyping process. The traditional viewhas been that stereotypes are used to ensure efficient process-ing of information and that under the pressure of limited timeor limited resources, the social perceiver will rely more onstereotypes (Bodenhausen, 1990; Macrae, Hewstone, &Griffiths, 1993) and will thus preserve precious resources(Macrae, Milne, & Bodenhausen, 1994). In addition, this effi-ciency is thought to be obtained by filtering out any informa-tion that is inconsistent with the stereotype and by processingonly stereotype consistent information. This kind of process-ing will serve to harden the stereotype and to render it resis-tant to change. Sherman et al. (1998), on the other hand,proposed that under the pressure of limited time or resources,an efficient system will actually attend more to unexpected,inconsistent information and less to stereotype consistent in-formation. This allows the system to maintain plasticity, andin the long run such processing will allow stereotypes tochange in the face of disconfirming information. Empiricalresults supported this system of encoding flexibility undercognitive load. Thus, as suggested also by several of our re-sults, time pressure or limited resources can reduce the ten-dency to fall prey to traditional biases of judgment orinformation processing.

In short, the findings of the current studies, along with re-sults of past research, indicate that effort does not guaranteean increase in accuracy. The relation between effort and accu-racy is likely to depend on many other factors. For example,Mantel and Kardes (1999) found that this relation depends onthe nature of the information used and the type of cognitiveoperations performed on the information. Individuals high inthe need for cognition were more likely to engage in effortful,attribute-based processing and were more susceptible to bi-ases involving direction-of-comparison effects. Gilbert andKrull (1988) suggested that either too little or too much pro-cessing of relevant information can result in bias and error(see also Meyers-Levy & Tybout, 1997, for a view that mod-erate levels of processing are optimal).

Another interesting aspect of our findings was the in-creased attention to positive features under time pressure,even when participants were asked to indicate which itemthey would not choose, a manipulation that was expected torender more salient the negative features of the items. Clearlythere is a precedent in the literature for greater weight to gen-erally be given to the negative features of objects (e.g., Pratto& John, 1991; Wright, 1974). However, recent evidence is

198 DHAR, NOWLIS, SHERMAN

not consistent with the notion that negative features will al-ways receive greater attention and greater weight in the judg-ment process. For example, Roskos-Ewoldsen and Fazio(1992) reported that objects toward which participants hadautomatically accessible attitudes drew special attention in anarray of objects when time for processing was highly limited.This was true for both accessible positive and accessible neg-ative attitudes, with no greater attention given to objects thatautomatically activated negative attitudes. Svenson et al.(1990) reported that, in a choice situation, time pressure infact increased the focus on positive features of the alterna-tives. We support such findings and obtain these results evenwhen the choice task was designed to increase salience ofnegative features. Finally, research has shown that consumersare more likely to choose higher quality brands and brandsthat offer more features over lower price brands when choos-ing quickly (Nowlis, 1995). If high perceived quality can beconsidered more of a positive dimension than low price, theseresults are also consistent with our findings.

Marketing Implications

Marketers need to understand how to maximize their sales inan environment where consumers are increasingly hurriedand stressed (Cristol & Sealey, 1996). Our research suggeststhat the choice set can play an important role in determiningwhich items are chosen when decisions are made in a hurry.In particular, the advantage that a compromise option haswhen decisions are made without time pressure can disappearand even be reversed when choices are made quickly. In addi-tion, when a brand is seen as an all-average alternative, it alsoloses share in such conditions. Thus, certain selling environ-ments might be more likely to benefit enriched or extremebrands when choices are made with a limited amount of time.Conversely, retailers can organize in-store displays to en-courage or discourage comparisons that enhance or attenuatecontext effects (e.g., Nowlis & Simonson, 1997). For exam-ple, a lower priced store brand can be placed next to a higherpriced national brand on the shelf, and price comparisons canbe encouraged. In addition, with the growth of sales over theInternet, it is becoming increasingly easy for marketers to al-ter the context in which brands are seen.

Several general implications also follow for retailers andother direct marketers who are mainly concerned with in-creasing overall revenues and profitability as opposed to thepurchase of a specific brand. For instance, an increase inproduct category variety might reduce the selection of inter-mediate quality alternatives for categories in which consum-ers make decisions quickly, but the reverse might be the casefor categories where consumers spend more time. Con-versely, strategies that encourage consumers to make carefultrade-off comparisons between different alternatives mightbackfire by making them more susceptible to certain contex-tual factors. To the extent that different brands have different

profit margins, retailers should take into account the implica-tions of category context on choice and profitability.

The notion of constructive preferences raises the ques-tion of how much time to spend when making purchase deci-sions. From a normative perspective, choice should bedetermined by selecting the alternative that has the highestoverall value independent of the choice context. Systematicshifts in preferences either with or without time pressure areproblematic. Descriptively speaking, the answer to thisquestion might depend on a consumer’s propensity to focuson relational characteristics. If you tend to focus on localtrade-off comparisons, having less time might make youmore consistent in your choices. Alternatively, if you pri-marily make global evaluation of each alternative prior tochoice, having more time might make you more accurate.

ACKNOWLEDGMENTS

We thank Frank Kardes and the anonymous reviewers of thisarticle for their helpful comments.

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Accepted by Frank Kardes.

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