Normative analyses of choice commonly assume value maximization: a numerical value or utility is associated with each option such that, given a set of options, the decision maker chooses the one with the highest value. An immediate consequence of value maximization, called context-independence, is that the relative ranking of any two options should not vary with the addition or deletion of other options. A person who prefers chicken over pasta should not change this preference on learning that fish is also available. Despite its intuitive appeal, there is evidence that decision makers do not always satisfy this condition. In this chapter we test the descriptive validity of context-independence in legal settings and discuss its prescriptive implications.

Two types of violations of context-independence – compromise effects and contrast effects – have recently been demonstrated. “Compromise effect” refers to the finding that the same option is evaluated more favorably when it is seen as intermediate in the set of options under consideration than when it is extreme. Consequently, compromise implies that the relative ranking of two options depends on the presence or absence of other options. Salespeople sometimes exploit this tendency by showing both bare bones and fancy products in order to induce customers to buy an intermediate product. Several experiments have demonstrated compromise effects. In one experiment subjects first reviewed several available Minolta cameras in a catalog. One group chose between a midlevel Minolta camera and a low-end camera; 50 percent chose each camera.