Moderation By Extremes: Biases in Reward Perceptions Drive Compromise Effects in Financial Bundles

Peggy Liu, University of Pittsburgh, USA
Cait Lamberton, University of Pittsburgh, USA
Kelly Haws, Vanderbilt University, USA
We find that compromise effects are stronger when middle options bundle extreme items (e.g., half high-risk/high-reward and half low-risk/low reward stocks) rather than being composed entirely of moderate items (e.g., individual stocks moderate in both risk and reward), because the bundle-of-extremes is viewed as more potentially rewarding, but not riskier.
[ to cite ]:
Peggy Liu, Cait Lamberton, and Kelly Haws (2016) ,"Moderation By Extremes: Biases in Reward Perceptions Drive Compromise Effects in Financial Bundles ", in NA - Advances in Consumer Research Volume 44, eds. Page Moreau and Stefano Puntoni, Duluth, MN : Association for Consumer Research, Pages: 537-538.