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27-397: IIA or Iia may refer to: Independence of irrelevant alternatives Indian Institute of Architects Indian Institute of Astrophysics Indianapolis International Airport Institute of Internal Auditors Information Industry Association International Investment Agreement Islamabad International Airport IIa or II-a,

54-431: A Luce model of choice. Regularity means that it should not be possible for the market share of any alternative to increase when another alternative is added to the choice set. The new alternative should reduce, or at best leave unchanged, the choice share of existing alternatives. Regularity is violated in the example shown below where a new alternative C not only changes the relative shares of A and B but actually increases

81-408: A consumer is ready to pay to choose the target rather than the competitor. Some research suggests that the attraction effect does not appear in realistic purchasing scenarios, for example when options are presented graphically, or when the target and the competitor are not exactly of the same value. The original authors had to underline again that the attraction effect occurs only if the consumer

108-489: A device that costs less. In Consideration Set 1, two devices are available: In this case, some consumers will prefer A for its greater storage capacity, while others will prefer B for its lower price. Now suppose that a new player, C , the "decoy", is added to the market; it is more expensive than both A , the "target", and B , the "competitor", and has more storage than B but less than A : The addition of decoy C — which consumers would presumably avoid, given that

135-469: A lower price can be paid for a model with more storage—causes A , the dominating option, to be chosen more often than if only the two choices in Consideration Set 1 existed; C affects consumer preferences by acting as a basis of comparison for A and B . Because A is better than C in both respects, while B is only partially better than C , more consumers will prefer A now than did before. C

162-532: A subtype of Type II supernova A rating in the Hong Kong motion picture rating system Iia, Estonia , village in Estonia See also [ edit ] 2A (disambiguation) , including a list of topics named II-A, etc. Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title IIA . If an internal link led you here, you may wish to change

189-569: A vote in which both alternatives are still approved or rated the same, or abstain, even in an election between only those two alternatives. If it is assumed to be at least possible that any voter having preferences might not abstain, or vote their favorite and least favorite candidates at differing ratings respectively, then these systems would also fail IIA. Allowing either of these conditions alone causes approval and range voting to fail IIA. The satisfaction of IIA leaves only voting methods that have undesirable in some other way, such as treating one of

216-440: Is also an example of the violation of the independence of irrelevant alternatives axiom of decision theory . More simply, when deciding between two options, an unattractive third option can change the perceived preference between the other two. The decoy effect is considered particularly important in choice theory because it is a violation of the assumption of "regularity" present in all axiomatic choice models, for example in

243-411: Is completely dominated by (i.e., inferior to) one option and only partially dominated by the other. When the asymmetrically dominated option is present, a higher percentage of consumers will prefer the dominating option than when the asymmetrically dominated option is absent. The asymmetrically dominated option is therefore a decoy serving to increase preference for the dominating option. The decoy effect

270-455: Is largely incompatible with the majority criterion unless there are only two alternatives and the vast majority of voting systems fail the criteria. The satisfaction of IIA by Approval and Range voting rests on making an unrealistic assumption that voters who have meaningful preferences between two alternatives, but would approve or rate those two alternatives the same in an election with other irrelevant alternatives, would necessarily either cast

297-663: Is often stated as "if one candidate ( X ) would win an election without a new candidate ( Y ), and Y is added to the ballot, then either X or Y should win the election." Arrow's impossibility theorem shows that no reasonable (non-random, non- dictatorial ) ranked voting system can satisfy IIA. However, Arrow's theorem does not apply to rated voting methods. These can pass IIA under certain assumptions, but fail it if they are not met. Methods that unconditionally pass IIA include sortition and random dictatorship . Deterministic voting methods that behave like majority rule when there are only two candidates can be shown to fail IIA by

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324-448: Is sometimes explained with a short story by philosopher Sidney Morgenbesser : Morgenbesser, ordering dessert, is told by a waitress that he can choose between blueberry or apple pie. He orders apple. Soon the waitress comes back and explains cherry pie is also an option. Morgenbesser replies "In that case, I'll have blueberry." Independence of irrelevant alternatives rules out this kind of arbitrary behavior, by stating that: In economics,

351-443: Is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated . An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others. In other words, in terms of specific attributes determining preferences, it

378-417: Is therefore a decoy whose sole purpose is to increase sales of A . Conversely, suppose that instead of C , a player D is introduced that has less storage than both A and B , and that is more expensive than B but not as expensive as A : The result here is similar: consumers will not prefer D , because it is not as good as B in any respect. However, whereas C increased preference for A , D has

405-496: The decoy effect shows that inserting a $ 5 medium soda between a $ 3 small and $ 5.10 large can make customers perceive the large as a better deal (because it's "only 10 cents more than the medium"). Behavioral economics introduces models that weaken or remove many assumptions of consumer rationality, including IIA. This provides greater accuracy, at the cost of making the model more complex and more difficult to falsify. In social choice theory , independence of irrelevant alternatives

432-466: The IIA criterion if it is assumed that voters rate candidates individually and independently of knowing the available alternatives in the election, using their own absolute scale. If voters do not behave in accordance with this assumption, then those methods also fail the IIA criterion. Balinski and Laraki disputed that any interpersonal comparisons are required for rated voting rules to pass IIA. They argue

459-475: The apple" or "don't take the apple", this person may conclude that there is only one apple left and so refrain from taking the last apple as they don't want to be greedy. However, if a third option "take another apple" were available, that would provide context that there are more apples in the basket, and they would then be free to take the first apple. Decoy effect In marketing , the decoy effect (or attraction effect or asymmetric dominance effect )

486-449: The availability of a common language with verbal grades is sufficient for IIA by allowing voters to give consistent responses to questions about candidate quality. In other words, they argue most voters will not change their beliefs about whether a candidate is "good", "bad", or "neutral" simply because another candidate joins or drops out of a race. Arguments have been made that IIA is itself an undesirable and/or unrealistic criteria. IIA

513-458: The axiom is connected to the theory of revealed preferences . Economists often invoke IIA when building descriptive (positive) models of behavior to ensure agents have well-defined preferences that can be used for making testable predictions . If agents' behavior or preferences are allowed to change depending on irrelevant circumstances, any model could be made unfalsifiable by claiming some irrelevant circumstance must have changed when repeating

540-449: The experiment. Often, the axiom is justified by arguing that any irrational agent will be money pumped until going bankrupt , making their preferences unobservable or irrelevant to the rest of the economy. While economists must often make do with assuming IIA for reasons of computation or to make sure they are addressing a well-posed problem , experimental economists have shown that real human decisions often violate IIA. For example,

567-513: The link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=IIA&oldid=1228434114 " Category : Disambiguation pages Hidden categories: Short description is different from Wikidata All article disambiguation pages All disambiguation pages Independence of irrelevant alternatives In behavioral economics , failures of IIA (caused by irrationality ) are called menu effects or menu dependence . This

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594-465: The opposite effect, increasing preference for B . Another example shown in Dan Ariely's book Predictably Irrational was a true case used by The Economist magazine. The subscription screen presented three options: Given these choices, 16% of the students in the experiment conducted by Ariely chose the first option, 0% chose the middle option, and 84% chose the third option. Even though nobody picked

621-418: The second option, when he removed that option the result was the inverse: 68% of the students picked the online-only option, and 32% chose the print and web option. The decoy effect is usually measured by comparing the frequency of choice of the target, A in the absence of the decoy, C , compared with when the decoy is present in the consideration set. The decoy effect can also be measured as how much more

648-450: The share of A in absolute terms. Similarly, the introduction of a new alternative D increases the share of B in absolute terms. Suppose there is a consideration set (options to choose from in a menu) that involves smartphones . Consumers will generally see higher storage capacity (number of GB ) and lower price as positive attributes; while some consumers may want a device that can store more photos, music, etc., other consumers will want

675-406: The use of a Condorcet cycle : Consider a scenario in which there are three candidates A , B , & C , and the voters' preferences are as follows: (These are preferences, not votes, and thus are independent of the voting method.) 75% prefer C over A , 65% prefer B over C , and 60% prefer A over B . The presence of this societal intransitivity is the voting paradox . Regardless of

702-412: The voters as a dictator, or requires making unrealistic assumptions about voter behavior. Amartya Sen argued that seemingly independent alternatives could provide context for individual choice, and thus that menu dependence might not be irrational. As an example, he described a person considering whether to take an apple out of a basket without being greedy. If the only two options available are "take

729-455: The voting method and the actual votes, there are only three cases to consider: For particular voting methods, the following results hold: Generalizations of Arrow's impossibility theorem show that if the voters change their rating scales depending on the candidates who are running, the outcome of cardinal voting may still be affected by the presence of non-winning candidates. Approval voting , score voting , and median voting may satisfy

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