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On the Importance of Context in Sequential Search
Author(s) -
Hsiao YuChin,
Kemp Simon,
Servátka Maroš
Publication year - 2020
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/soej.12422
Subject(s) - framing (construction) , framing effect , computer science , real estate , context (archaeology) , decision quality , frame (networking) , marketing , economics , business , psychology , social psychology , knowledge management , engineering , team effectiveness , telecommunications , structural engineering , finance , persuasion , paleontology , biology
We experimentally investigate whether framing an individual‐choice decision in a market setting results in a different outcome than when the decision is described in a context‐free frame. We further explore whether the context effect is triggered solely by the frame or whether a richer descriptive content is required to establish familiarity with the decision‐making environment. Understanding what constitutes context is central to formulating practical recommendations aiming to improve the quality of individual decisions. Our results show that framing a sequential search problem as selling houses leads to better decisions than a context‐free frame. Manipulating whether or not the framed decision‐making scenario includes a description of the house, which would be naturally available in a real estate market, does not impact the length of search or the value of accepted offers.