How Context Affects Choice


Due to its origins in the literature on judgment and decision-making, context effects in marketing are construed exclusively in terms of how choices deviate from utility maximization principles as a function of how choices are presented (e.g., framing, sequence, composition). This limits our understanding of a range of other relevant context effects on choice. This paper broadens the scope of context effects to include social (e.g., with friends or family) and situational factors (e.g., location (home/store), time, weather).We define contexts as any factor that has the potential to shift the choice outcomes by altering the process by which the decision is made. We use this lens to integrate the psychology literature on habitual choice, System I and II decision-making, and a recent stream of empirical work that involves social and situational effects into the scope of context effects. We distinguish between exogenous and endogenous context effects, based on whether the decision-maker chooses the context. We then discuss issues of empirically identifying context effects when using either experimentally generated data or naturally occurring secondary data. We conclude with a discussion of trends and opportunities for new research on context effects.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2


  1. 1.

    In some cases, the line between innate preferences and other decision processes might be blurred, such as under the theory of context-dependent constructed preferences [8].

  2. 2.

    One could argue that the EBA strategy is rather conscious and intentional, and as such should be characterized as Type 2 processing. However, Shah and Oppenheimer [68] classify it as a heuristic that examines fewer cues, integrates less information, and examines fewer alternatives than under a fully compensatory model in System 2. In addition, both intuitive (System 1) and deliberate (System 2) thinking can be conscious and nonconscious in nature (Evans and [24]).


  1. 1.

    Amir O, Levav J (2008) Choice construction versus preference construction: the instability of preferences learned in context. J Mark Res 45(2):145–148.

    Article  Google Scholar 

  2. 2.

    Andrews M, Luo X, Zheng F, Ghose A (2016) Mobile ad effectiveness: hyper-contextual targeting with crowdedness. Mark Sci 35(2):218–233.

    Article  Google Scholar 

  3. 3.

    Arora N, Huber J (2001) Improving parameter estimates and model prediction by aggregate customization in choice experiments. J Consum Res 028(2):273–283.

    Article  Google Scholar 

  4. 4.

    Arora N, Henderson T, Liu Q (2011) Non-compensatory dyadic choices. Mark Sci 30(6):1028–1047.

    Article  Google Scholar 

  5. 5.

    Ataman MB, Rooderkerk RP, Otter T (2017) Context dependence in stated choice experiments, Working Paper

  6. 6.

    Barsalou LW (1982) Context-independent and context-dependent information in concepts. Mem Cogn 10(1):82–93.

    Article  Google Scholar 

  7. 7.

    Ben-Akiva M, de Palma A, McFadden D, Abou-Zeid M, Chiappori P-A, de Lapparent M, Durlauf SN et al (2012) Process and context in choice models. Mark Lett 23(2):439–456.

    Article  Google Scholar 

  8. 8.

    Bettman JR, Luce MF, Payne JW (1998) Constructive consumer choice processes. J Consum Res 25(3):187–217.

    Article  Google Scholar 

  9. 9.

    Boldt L, Arora N (2017) Dyadic compromise effect. Mark Sci 30(3):436–452

    Article  Google Scholar 

  10. 10.

    Bollinger B, Gillingham K (2012) Peer effects in the diffusion of solar photovoltaic panels. Mark Sci 31(6):900–912.

    Article  Google Scholar 

  11. 11.

    Bradley JV (1958) Complete counterbalancing of immediate sequential effects in a Latin square design. J Am Stat Assoc 53(June):525–528.

    Article  Google Scholar 

  12. 12.

    Bronnenberg BJ, Dubé J-P, Gentzkow M (2012) The evolution of brand preferences: evidence from consumer migration. Am Econ Rev 102(6):2472–2508

    Article  Google Scholar 

  13. 13.

    Carden, Lucas, Wood, Wendy, Neal, David T., Pascoe, Anthony. (2017) "Incentives Activate ControlMindset: Benefits Deliberate Behaviors but Impedes Habit Performance." Journal of the Association forConsumer Research, 2(3).

  14. 14.

    Chaiken S (1980) Heuristic versus systematic information processing and the use of source versus message cues in persuasion. J Pers Soc Psychol 39(5):752–766

    Article  Google Scholar 

  15. 15.

    Chandon P, Wesley Hutchinson J, Bradlow ET, Young S (2009) Does in-store marketing work? Effects of the number and position of shelf facings on brand attention and evaluation at the point of purchase. J Mark 73(6):1–17.

    Article  Google Scholar 

  16. 16.

    Chandon P, Ordabayeva N (2009) Supersize in one dimension, downsize in three dimensions: effects of spatial dimensionality on size perceptions and preferences. J Mark Res 46(6):739–775.

    Article  Google Scholar 

  17. 17.

    Cheema A, Soman D (2008) The effect of partitions on controlling consumption. J Mark Res 45(6):665–675.

    Article  Google Scholar 

  18. 18.

    Cumming G (2014) The new statistics: why and how. Psychol Sci 25(1):7–29.

    Article  Google Scholar 

  19. 19.

    Dellaert BGC, Swait J, Vic Adamowicz WL, Arentze TA, Bruch EE, Cherchi E, Chorus C, Donkers B, Feinberg FM, Marley AAJ, Court Salisbury L (2017) Individuals decisions in the presence of multiple goals, forthcoming in Customer Needs and Solutions

  20. 20.

    Dhar R, Gorlin M (2013) A dual-system framework to understand preference construction processes in choice. J Consum Psychol 23(4):528–542.

    Article  Google Scholar 

  21. 21.

    Eliaz K, Spiegler R (2011) Consideration sets and competitive marketing. Rev Econ Stud 78(1):235–262.

    Article  Google Scholar 

  22. 22.

    Ent MR, Baumeister RF, Tice DM (2015) Trait self-control and the avoidance of temptation. Personal Individ Differ 74:12–15

    Article  Google Scholar 

  23. 23.

    Evans JSBT (2012) Questions and challenges for the new psychology of reasoning. Think Reason 18(1):5–31.

    Article  Google Scholar 

  24. 24.

    Evans JSBT, Stanovich K (2013) Dual-process theories of higher cognition: advancing the debate. Perspect Psychol Sci 8(3):223–241

    Article  Google Scholar 

  25. 25.

    Evans JSBT, Handley SJ, Harper CNJ (2001) Necessity, possibility, and belief: a study of syllogistic reasoning. Q J Exp Psychol Sect A 54(3):935–958

    Article  Google Scholar 

  26. 26.

    Galla BM, Duckworth AL (2015) More than resisting temptation: beneficial habits mediate the relationship between self-control and positive life outcomes. J Pers Soc Psychol 109(3):508–525

    Article  Google Scholar 

  27. 27.

    Gardete P (2015) Social effect in the in-flight marketplace: characterization and managerial implications. J Mark Res 52(3):360–374.

    Article  Google Scholar 

  28. 28.

    Geier A, Wansink B, Rozin P (2012) Red potato chips: segmentation cues can substantially decrease food intake. Health Psychol 31(3):398–401.

    Article  Google Scholar 

  29. 29.

    Gneezy A (2017) Field experimentation in marketing research. J Mark Res 54(1):140–143.

    Article  Google Scholar 

  30. 30.

    Gneezy A, Gneezy U, Laura D (2014) Reference-dependent model of the price-quality heuristic. J Mark Res 51(April):153–164

    Article  Google Scholar 

  31. 31.

    Griffin D, Liu W, Khan U (2005) A new look at constructed choice processes. Mark Lett 16(3-4):321–333.

    Article  Google Scholar 

  32. 32.

    Hansen K, Singh V, Kahn R (2016) Aging and decision making: evidence from a mundane activity, mimeo

  33. 33.

    Hedgcock W, Rao AR (2009) Trade-off aversion as an explanation for the attraction effect: a functional effect magnetic resonance imaging study. J Mark Res 46(February):1–13.

    Article  Google Scholar 

  34. 34.

    Huang G, Khwaja A, Sudhir K (2015) Short-run needs and long-term goals: a dynamic model of thirst management. Mark Sci 34(5):702–721.

    Article  Google Scholar 

  35. 35.

    Huber J, Zwerina K (1996) The importance of utility balance in efficient choice designs. J Mark Res 33(3):307–317.

    Article  Google Scholar 

  36. 36.

    Hutchison JW, Kamakura WA, Lynch JG Jr (2000) Unobserved heterogeneity as an alternative explanation for ‘reversal’ effects in behavioral research. J Consum Res 27(December):324–344.

    Article  Google Scholar 

  37. 37.

    John LK, Donnelly GE, Roberto CA (2017) Psychologically informed implementations of sugary drink portion limits. Psychol Sci 28(5):620–629.

    Article  Google Scholar 

  38. 38.

    Johnson EJ, Goldstein D (2003) Do defaults save lives? Science 302(5649):1338–1339.

    Article  Google Scholar 

  39. 39.

    Kahneman D, Frederick S (2002) Representativeness revisited: attribute substitution in intuitive judgment. In: Gilvich T, Griffin D, Kahneman D (eds) Heuristics of intuitive judgment: extensions and applications. Cambridge University Press, New York

    Google Scholar 

  40. 40.

    Kahneman D, Tversky A (1984) Choices, values, and frames. Am Psychol 39(4):341–350.

    Article  Google Scholar 

  41. 41.

    Karmarkar U, Bollinger B (2015) BYOB: how bringing your own shopping bags leads to treating yourself and the environment. J Mark 79(4):1–15.

    Article  Google Scholar 

  42. 42.

    Kelman M, Rottenstreich Y, Tversky A (1996) Context-dependence in legal decision making. J Leg Stud 25(2):287–318.

    Article  Google Scholar 

  43. 43.

    Kessels R, Goos P, Vandebroek M (2006) A comparison of criteria to design efficient choice experiments. J Mark Res 43(3):409–419.

    Article  Google Scholar 

  44. 44.

    Kivetz R, Netzer O, Srinivasan V (2004) Alternative models for capturing the compromise effect. J Mark Res 41(August):237–257.

    Article  Google Scholar 

  45. 45.

    Kivetz R, Netzer O, Schrift R (2008) The synthesis of preference: bridging behavioral decision research and marketing science. J Consum Psychol 18:179–186

    Article  Google Scholar 

  46. 46.

    Klauer KC, Musch J, Naumer B (2000) On belief bias in syllogistic reasoning. Psychol Rev 107(4):852–884.

    Article  Google Scholar 

  47. 47.

    Kuhfeld WF, Tobias R (2005) Large factorial designs for product engineering and marketing research applications. Technometrics 47(2):132–141

    Article  Google Scholar 

  48. 48.

    Lamp S (2015) Projection bias in solar electricity markets, Working Paper

  49. 49.

    Lee L, Amir O, Ariely D (2009) In search of homo economicus: cognitive noise and the role of emotion in preference consistency. J Consum Res 36.2:173–187.

    Article  Google Scholar 

  50. 50.

    Li C, Luo X, Cheng Z, Wamg X (2017) Sunny, rainy, and cloudy with a chance of mobile promotion effectiveness. Mark Sci 36(5):762–779.

    Article  Google Scholar 

  51. 51.

    Liu W (2008) Focusing on desirability: the effect of decision interruption and suspension on preferences. J Consum Res 35(4, December):640–652

    Article  Google Scholar 

  52. 52.

    Liu W, Simonson I (2017) Sequential shortlists, working paper

  53. 53.

    Louviere JJ, Woodworth GG (1983) Design and analysis of simulated consumer choice or allocation experiments: an approach based on aggregate data. J Mark Res 20(November):350–367.

    Article  Google Scholar 

  54. 54.

    Lubow RE, Rifkin A, Alek M (1976) B The context effect: the relationship between stimulus preexposure and environmental preexposure determines subsequent learning. J Exp Psychol Anim Behav Process 2.1:38

    Article  Google Scholar 

  55. 55.

    Lucas RE (1976) Econometric policy evaluation: a critique. Carn-Roch Conf Ser Public Policy 1:19–46.

    Article  Google Scholar 

  56. 56.

    Lynch JG Jr (2015) Handout 10: within subjects ANOVA—omnibus analysis and contrasts. Teaching Note

  57. 57.

    Mailath GJ, Postlewaite A (2003) The social context of economic decisions. J Eur Econ Assoc 1(2/3):354–362.

    Article  Google Scholar 

  58. 58.

    Miller G, Mobarak AM (2015) Learning about new technologies through social networks: experimental evidence on nontraditional stoves in Bangladesh. Mark Sci 34(4):480–499.

    Article  Google Scholar 

  59. 59.

    Neal DT, Wood W, Labrecque JS, Lally P (2012) How do habits guide behavior? Perceived and actual triggers of habits in daily life. J Exp Soc Psychol 48(2):492–498.

    Article  Google Scholar 

  60. 60.

    Petty RE, Cacioppo JT (1986) The elaboration likelihood model of persuasion. In: Berkowitz L (ed) Advances of experimental social psychology. Academic Press, San Diego, pp 123–205

    Google Scholar 

  61. 61.

    Pocheptsova A, Amir O, Dhar R, Baumeister RF (2009) Deciding without resources: resource depletion and choice in context. J Mark Res 46(2):344–355.

    Article  Google Scholar 

  62. 62.

    Qing Liu and Neeraj Arora (2011) “Efficient choice designs for a consider-then choose model,” Marketing Science, 30(2): pp 321–338.

  63. 63.

    Ratner RK, Soman D, Zauberman G, Ariely D, Carmon Z, Keller PA, Kim BK, Lin F, Malkoc S, Small DA, Wertenbroch K (2008) How behavioral decision research can enhance consumer welfare: from freedom of choice to paternalistic intervention. Mark Lett 19(3-4):383–397.

    Article  Google Scholar 

  64. 64.

    Rooderkerk RP, van Heerde HJ, Bijmolt T (2011) Incorporating context effects into a choice model. J Mark Res 48(4):767–780.

    Article  Google Scholar 

  65. 65.

    Sándor Z, Wedel M (2002) Profile construction in experimental choice designs for mixed logit models. Mark Sci 21(4):455–475

    Article  Google Scholar 

  66. 66.

    Sela A, LeBoeuf RA (2017) Comparison neglect in upgrade decisions. J Mark Res 54(August):556–571.

    Article  Google Scholar 

  67. 67.

    Sela A, Berger J, Liu W (2009) Variety, vice, and virtue: how assortment size influences option choice. J Consum Res 35(6, April):941–951

    Article  Google Scholar 

  68. 68.

    Shah AK, Oppenheimer DM (2008) Heuristics made easy: an effort reduction framework. Psychol Bull 134(2):207–222.

    Article  Google Scholar 

  69. 69.

    Sharpe KM, Staelin R, Huber J (2008) Using extremeness aversion to fight obesity: policy implications of context dependent demand. J Consum Res 35(October):406–422.

    Article  Google Scholar 

  70. 70.

    Simonson I (1989) Choice based on reasons: the case of attraction and compromise effects. J Consum Res 16(September):158–174.

    Article  Google Scholar 

  71. 71.

    Simonson I, Nowlis SM (2000) The role of explanations and need for uniqueness in consumer decision making: unconventional choices based on reasons. J Consum Res 27(1):49–68

    Article  Google Scholar 

  72. 72.

    Simonson I, Sela A (2011) On the heritability of consumer decision making: an explanatory approach for studying genetic effects on judgment and choice. J Consum Res 37(6):951–966

    Article  Google Scholar 

  73. 73.

    Smith SA, E Vela (2001), Environmental context-dependent memory: a review and meta-analysis, Psychon Bull Rev, 8 (2), 203–220,

  74. 74.

    Stanovich KE, West RF (2000) Individual differences in reasoning: implications for the rationality debate? Behav Brain Sci 23(5):645–665.

    Article  Google Scholar 

  75. 75.

    Sudhir K (2016) Editorial: the exploration-exploitation tradeoff and efficiency in knowledge production. Mark Sci 35(1):1–9.

    Article  Google Scholar 

  76. 76.

    Sudhir K, Talukdar D (2015) The ‘Peter Pan syndrome’ in emerging markets: the productivity-transparency trade-off in IT adoption. Mark Sci 34(4):500–521

    Article  Google Scholar 

  77. 77.

    Sudhir K, Tewari I (2015) Long term effects of ‘prosperity in youth’ on consumption: evidence from China. Working Paper, Yale School of Management

  78. 78.

    Sudhir K, Roy S, Cherian M (2016) Do sympathy biases induce charitable giving? The effects of advertising content, Mark Sci, forthcoming

  79. 79.

    Swait J, Adamowicz W, Hanemann M, Diederich A, Krosnick J, Layton D, Provencher W, Schkade D, Tourangeau R (2002) Context dependence and aggregation in disaggregate choice analysis. Mark Lett 13(3):195–205.

    Article  Google Scholar 

  80. 80.

    Tetlock PE (1985) Accountability: the neglected social context of judgment and choice. Res Organ Behav 7:297–332

    Google Scholar 

  81. 81.

    Thaler RH (1999) Mental accounting matters. J Behav Decis Mak 12(3):183–206.<183::AID-BDM318>3.0.CO;2-F

    Article  Google Scholar 

  82. 82. (2017) Apple-watch is getting way better heart-rate monitoring. Appeared online on September 12, 2017

  83. 83.

    Tversky A (1972) Eliminations by aspects: a theory of choices. Psychol Rev 79(4):281–299.

    Article  Google Scholar 

  84. 84.

    Tversky A, Simonson I (1993) Context-dependent preferences. Manag Sci 39(10):1179–1189

    Article  Google Scholar 

  85. 85.

    Wakefield KL, Inman JJ (2003) Situational price sensitivity: the role of consumption occasion, social context and income. J Retail 79(4):199–212.

    Article  Google Scholar 

  86. 86.

    Wedel M, Pieters R (2008) A review of eye-tracking research in marketing. Rev Mark Res 4, Naresh K. Malhotra, ed. Armonk, NY: ME Sharpe, 123-147

  87. 87.

    Wernerfelt, Birger (1995), "A rational reconstruction of the compromise effect: using market data to infer utilities," Journal of Consumer Research, 21 627–633.

  88. 88.

    Wood W, Rünger D (2016) Psychology of habit. Annu Rev Psychol 67:289–314

    Article  Google Scholar 

  89. 89.

    Wood W, Tam L, Guerrero M (2005) Changing circumstances, disrupting habits. J Pers Soc Psychol 88(6):918–933

    Article  Google Scholar 

  90. 90.

    Yu J, Goos P, Vandebroek M (2009) Efficient conjoint choice designs in the presence of respondent heterogeneity. Mark Sci 28(1):122–135

    Article  Google Scholar 

  91. 91.

    Zeithammer R, Otter T, Rooderkerk RP (2017) Modeling context effects in choice: a critical review. Working Paper

Download references

Author information



Corresponding author

Correspondence to Raphael Thomadsen.

Ethics declarations

Conflict of Interest

The authors declare that they have no conflict of interest.

Additional information

This paper is based on the presentations and discussions in the “How Context Affects Choice” workshop at the 2016 Choice Symposium held at Lake Louise, AB, Canada.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Thomadsen, R., Rooderkerk, R.P., Amir, O. et al. How Context Affects Choice. Cust. Need. and Solut. 5, 3–14 (2018).

Download citation


  • Context dependence
  • Choice
  • Behavioral decision-making
  • Consumer behavior
  • Moderating variables
  • Information processing