How Imperfect Practice Leads to Imperfection: A Hierarchical Linear Modeling Approach to Frustration during an Iterative Decision

Abstract

This paper proposes the concept of law of diminishing returns and decisional commitment, by studying the way in which subjects hone in on a set of choices to make a decision over several decision occasions. We conducted an experiment with seventy-nine subjects who had to choose a computer they would buy, given monetary constraints, from a large choice set. Our goal in this research was to study how elapsed time and number of decision occasions affect choice quality. We utilized hierarchical linear modeling in order to study the individuals’ choice quality growth over time along with several individual- level covariates. Specifically, we posited that there may be conditions under which the law of diminishing returns may not always prevail to explain choice decisions. Our findings show significant results for two different models. The first model shows that choice quality and elapsed time are related in a quadratic fashion with confidence as a significant level 2 predictor. The second model shows that choice quality and number of decision occasions are linearly related with frustration as a significant level 2 covariate. Overall, the results show that the choice quality decreases over time, especially for those with high confidence level; choice quality increases with the number of decision occasions, especially for those with high frustration level.