TITLE:
Temptation in Purchasing Decision: A Quasi Experiment to Validate the Set Betweenness Axiom
AUTHORS:
Reddy Sai Shiva Jayanth, Kausik Gangopadhyay
KEYWORDS:
Temptation, Self Control, Set Betweenness, Commitment Ranking, Quasi Experiment
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.10,
June
19,
2018
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.