Contextual Cues and Socially Relevant Information: Are Consumers Sticking to Context When They Know What Others Choose?

Decision making is often influenced by choice set composition. This paper investigates the impact of socially relevant information on compromise effect. In study 1 we show that social cue moderates compromise effect in favor of the most popular alternative. We explain this result by showing that social information makes options less extreme modifying the strength of compromise effect. In study 2 we document that this result is resilient to order of stimuli presentation. In study 3 we role out the possibility that social information influenced the relative weights of the attributes. Finally, in study 4 we show that the impact of social information on compromise effect diminishes when product attribute span is enlarged.