Distinction bias

Distinction bias (a concept of decision theory), is the tendency to view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately.

The concept was advanced by Hsee and Zhang as an explanation for differences in evaluations of options between joint evaluation mode and separate evaluation mode (2004). Evaluation mode is a contextual feature in decision making. Joint evaluation mode is when options are evaluated simultaneously, and separate evaluation mode is when each option is evaluated in isolation (e.g., Hsee, 1998; Hsee & Leclerc, 1998). Research shows that evaluation mode affects the evaluation of options, such that options presented simultaneously are evaluated differently than the same options presented separately.

Hsee and Zhang (2004) offered a number of potential explanations for this change in preferences from joint evaluation to separate evaluation, including the distinction bias. The distinction bias suggests that comparing two options (as done in joint evaluation) makes even small differences between options salient. In other words, viewing options simultaneously makes them seem more dissimilar than when viewing and evaluating each in isolation.

Understanding the differences between joint evaluation and separate evaluation is important because while preferences are often formed and decisions made through distinction, options are generally experienced separately. This results in a mismatch in which the best decision in the choice context may not provide the best experience. For example, when televisions are displayed next to each other on the sales floor, the difference in quality between two very similar, high-quality televisions may appear great. A consumer may pay a much higher price for the higher-quality television, even though the difference in quality is imperceptible when the televisions are viewed in isolation. Because the consumer will likely be watching only one television at a time, the lower-cost television would have provided a similar experience at a lower cost.

References

• Hsee, C.K. (1998). "Less is better: When low-value options are valued more highly than high-value options". Journal of Behavioral Decision Making 11 (2): 107–121. doi:10.1002/(SICI)1099-0771(199806)11:2<107::AID-BDM292>3.0.CO;2-Y. 
• Hsee, C.K.; Leclerc, F. (1998). "Will products look more attractive when presented separately or together?". The Journal of Consumer Research 25: 175–186. doi:10.1086/209534. 
• Hsee, C.K.; Zhang, J. (2004). "Distinction bias: Misprediction and mischoice due to joint evaluation". Journal of Personality and Social Psychology 86 (5): 680–695. doi:10.1037/0022-3514.86.5.680. PMID 15161394.