Carey Morewedge, Tepper School of Business, Carnegie Mellon University
Carey Morewedge, Tepper School of Business, Carnegie Mellon University
When comparisons do not matter: An attentional account of hedonic contrast efforts
When comparisons do not matter: An attentional account of hedonic contrast efforts
Abstract
People think that counterfactual alternatives--experiences that they could have had--make the experiences that they have better or worse by comparison. Hedonic contrast effects are believed to be so strong that many people are willing to sacrifice absolute value for relative value. Most people, for example, say they would be happier in a world in which they earned $50,000 and their peers earned $25,000 than in a world in which they earned $100,000 and their peers earned $200,000. In three papers, my colleagues and I have tested the accuracy of these predictions and found that hedonic contrasts are often overestimated. This is because people typically devote more attention to the experience that they are having and less attention to its alternatives while having the experience than while imagining the experience. I report demonstrations of this phenomenon with past, present, future, and counterfactual alternatives. I then describe tests of our theoretical account, examining when and why alternatives sometimes do and do not produce the hedonic contrast effects that people anticipate, and implications for decisions in which consumers must make tradeoffs between absolute and relative value.