Ran Kivetz

Scope Insensitivity and the "Mere Token" Effect

Coauthor(s): Oleg Urminsky.

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Abstract:
Decisions often involve tradeoffs between a more normative option and a less normative but more tempting option. We propose that the intrapersonal conflict evoked by choices involving incompatible goals is resolved through scope insensitive justifications. We describe one such mechanism, the "mere token" effect, a new phenomenon in decision-making. We demonstrate that adding a certain and immediate "mere token" amount to both options increases choices of the later-larger option in intertemporal choice and of the riskier-larger option in risky choice. This effect is found to be scope insensitive, such that the size of the "mere" token amount does not moderate the effect. We show that reducing the degree of intrapersonal choice conflict, either by increasing the psychological distance to the choice outcomes or by framing the more rational option as the status quo, debiases the effect. Further, we show that the mere token effect is enhanced when the options represent a starker contrast that heightens the emotional nature of the choice conflict. We empirically rule out a series of alternative explanations, including normative and descriptive utility-based models, perceptual effects, liquidity constraints, and naïve diversification. We discuss the direct implications of the mere token effect for the marketing of financial services and, more generally, for consumer purchases involving either bundles of goods and services or multi-attribute choice.

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