Temptation in Purchasing Decision: A Quasi Experiment to Validate the Set Betweenness Axiom - Theoretical Economics Letters

TEL > Vol.8 No.10, June 2018

Temptation in Purchasing Decision: A Quasi Experiment to Validate the Set Betweenness Axiom ()

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DOI: 10.4236/tel.2018.810111 556 Downloads 1,296 Views

Author(s)

Reddy Sai Shiva Jayanth, Kausik Gangopadhyay

Affiliation(s)

Indian Institute of Management Kozhikode, IIMK Campus, Calicut, India.

ABSTRACT

We examined the Set Betweenness axiom, the most crucial assumption in the literature studying Temptation and Self-control starting with the seminal work by Gul and Pesendorfer [1]. This axiom states that presence of a tempting alternative creates a self-control problem for the decision maker who prefers a menu that does not include the tempting alternative over a menu that does. We identified reduced price as a tempting alternative and conducted a quasi-experiment on 288 respondents. The respondents expressed their preference between menus and alternatives that contain a tempting good at a reduced price and/or that good at a non-reduced price. We chose ice cream and shirt as two different choices for goods. Our results demonstrate that that choice that is consistent with Set Betweenness Axiom is the most observed choice. Moreover, people with more familial wealth may have higher preference for commitment.

KEYWORDS

Temptation, Self Control, Set Betweenness, Commitment Ranking, Quasi Experiment

Share and Cite:

Jayanth, R. and Gangopadhyay, K. (2018) Temptation in Purchasing Decision: A Quasi Experiment to Validate the Set Betweenness Axiom. Theoretical Economics Letters, 8, 1709-1720. doi: 10.4236/tel.2018.810111.

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