PHANTOM DECOYS AND THEIR IMPACT ON CHOICES AND PERCEPTIONS

Phantoms are options unavailable at the time of choice; they are unknown if unavailability is disclosed ex-post. Different theories suggest contradictory effects: we investigate phantoms’ kind (known, unknown) and position (close, extreme). We find that unknown phantoms produce an adverse context for the target option, with extreme phantoms emphasizing the loss. Instead, known phantoms produce a favorable context for the target option, with close phantoms emphasizing the gain. Phantoms also impact satisfaction and justice, negatively. Extreme phantoms and unknown phantoms emphasize negative feelings. A high percentage of subjects encountering unknown phantoms state the intention to quit choice after discovering unavailability.