The Power of Comparison: How It Affects Decision Making

By Colleen Roller

Published: January 5, 2011

“Since we do not possess an inherent ability to judge the value of something in isolation, we determine value by comparing and contrasting one thing to another.”

In my last column, I discussed how the number of options in a choice set affects decision making. In this column, I’ll talk about the implications of a choice set—that is, how the relationships between and among options affect people’s ability to decide.

Let’s begin by addressing a very important reality that carries significant impact on human beings’ ability to make decisions effectively: the concept of relativity, through which people assign value to something—anything—by comparing it to something else. Since we do not possess an inherent ability to judge the value of something in isolation, we determine value by comparing and contrasting one thing to another.

People do not make judgments and decisions in a vacuum. They make them against a backdrop of available options. And a choice set—what the options are and how they relate to each other—is an important aspect of the context in which they make decisions.

The Real Value of $10.00

“People evaluate choices in relative rather than in absolute terms.”

To illustrate the power of context in people’s assessment of value, consider this question: Would you drive ten minutes out of your way to save $10 on a $25 blanket?

Now consider this question: Would you drive ten minutes out of your way to save $10 on a $125 jacket?

If you’re like many people, you’d be more willing to drive to save the $10 in the first example than in the second. Why? Isn’t $10 worth $10? Why does the value judgment seem to change depending on the situation?

Because people determine the value of the savings relative to the cost of the item, $10 seems to be worth a lot more in comparison to $25 than to $125. People evaluate choices in relative rather than in absolute terms.

Relativity in Decision Making

“If people’s preferences were well defined, … how many options are available or what options are available would not affect their decisions.”

Essentially, the concept of relativity in decision making says:

  • People assign value to things by comparing one thing to another. People do not possess an innate value meter that determines absolute value.
  • People are constantly comparing and contrasting physical things, people, experiences, and ephemeral things such as emotions, attitudes, and points of view.

If people’s preferences were well defined, the contexts in which they make decisions would not affect their decision outcomes—that is, how many options are available or what options are available would not affect their decisions. But research shows that decision outcomes are very dependent on these things.

The Effect of Comparison on Evaluation

Because people have no innate means of determining the value of something, whether they evaluate something by itself or in comparison to something else often impacts their preferences and decision outcomes.

Researchers conducted a study in which they asked a group of people how much they would be willing to pay for a 20,000-entry dictionary with a torn cover. They asked another group how much they would pay for a 10,000-entry dictionary with a cover that was intact. Table 1 shows the results.

Table 1—What people were willing to pay

Dictionary Description Price Willing to Pay

A

20,000 entries with a torn cover

$20

B

10,000 entries with an intact cover

$24

Then, they asked a third group of people to evaluate the two dictionaries side by side and determine how much they would be willing to pay for each of them. Table 2 shows the results.

Table 2—How people compared the value of two dictionaries

Dictionary Description Price Willing to Pay

A

20,000 entries with a torn cover

$27

B

10,000 entries with an intact cover

$19

As you can see, people valued the dictionaries very differently, depending on whether they considered them in isolation or by comparing them side by side. When a person evaluates a dictionary in isolation, it is difficult to determine what makes a good dictionary. How many entries does a good dictionary have? But a torn cover is easy to evaluate: it means the dictionary is defective and, consequently, of less value.

However, when people considered the two dictionaries side by side, it was easy for them to determine which one was the better of the two. Clearly, a dictionary with 20,000 entries is superior to one with only 10,000 entries. The process of comparison makes evaluation easy and draws attention to the more important attributes under consideration—in this case, the number of entries in the two dictionaries. [1]

Gut Versus Head

“Most of our decision making occurs at a Gut level. … Gut is very attuned to contrasts….”

In my first column, I talked about how we are of two minds when making decisions. Most of our decision making occurs at a Gut level. However, Head can step in and overrule Gut’s decisions. Gut is very attuned to contrasts—the difference between big and small, light and dark, or perfect and defective, for example.

When people considered each dictionary in isolation, Gut made an instant assessment of the value of the dictionary with the torn cover: a torn cover = defective. Head didn’t have enough information to overrule Gut’s decision. It couldn’t answer the question: how many entries does a good dictionary have?

However, when people assessed both dictionaries in a side-by-side comparison, Head gained enough information to readily see that having 20,000 entries was clearly superior to having 10,000 entries, and the torn cover was a merely cosmetic factor that had no adverse impact on the true value of the dictionary.

Implications for Design

“An important aspect of designing contexts for decision making is whether we expect people to evaluate something in isolation rather than through a process of comparison.”

In addition to determining the right number of options to present and what options to present, an important aspect of designing contexts for decision making is whether we expect people to evaluate something in isolation rather than through a process of comparison. These aspects of a decision-making context are significant drivers of decision outcomes.

Here are three valuable takeaways UX designers should keep in mind when designing for decision making:

  • People typically determine the value of something by making comparisons.
  • People are constantly comparing and contrasting just about everything.
  • People’s assessment of value is highly dependent upon whether they consider something in isolation or by making a comparison.

If your design requires people to evaluate something in isolation, be aware that people assign value by comparing things to one another. If your current design does not provide any points of comparison, consider adding the types of information people would typically look for in making a comparison. In the dictionary study, for example, it might have been helpful to provide supporting information such as: Most college-level dictionaries contain at least 50,000 entries.

If your design does allow people to compare items, think about what attributes they would consider as they compare and contrast those items. What information should you provide about the items? How will people use that information during their comparison process?

UX professionals can provide significant value through their designs by being cognizant of people’s limited ability to assign absolute value and the powerful role context plays in the decision-making process.

Note

[1] Hsee, Christopher K. “Attribute Evaluability: Its Implications for Joint-Separate Evaluation Reversals and Beyond.” Organizational Behavior and Human Decision Processes, Vol. 67, No. 3, 1996.

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