ANALYSIS Understanding the use of non-compensatory decision rules in discrete choice experiments: The role of emotions ☆ Jorge E. Araña ⁎, Carmelo J. León University of Las Palmas de Gran Canaria, Spain abstract article info Article history: Received 18 November 2008 Received in revised form 27 February 2009 Accepted 1 March 2009 Available online 3 April 2009 Keywords: Decision rules Emotions Stated preference methods Non-market valuation JEL classification: D0 Q51 Q26 When making choices, individuals can follow alternative strategies or decision rules to the traditional compensatory utility maximization, raising doubts about to what extent these choices can be used to elicit preferences. In this paper we use a verbal protocol approach to investigate the use of alternative decision rules in discrete choice experiments. The main interest is to identify some of the determinants of the context that play a role in the choice of a specific strategy or decision rule. Our results show that emotions can partially explain this choice among compensatory and simpler non-compensatory decision rules. We also find that the number of years of education – and not personal income – are positively correlated with the probability of choosing a non-compensatory decision rules. Finally, by manipulating alternative specific emotions (sadness, disgust) we find that emotions of the same valence can have opposing causal effects on the decision rule choice. © 2009 Elsevier B.V. All rights reserved. 1. Introduction Discrete choice experiments (DCEs) are a type of stated preference methods (SPM) that has become increasingly popular in non-market valuation. They consist of asking individuals about alternative profiles for the attributes of a particular environmental policy or non-market good. In this task subjects are asked to decide upon the alternative that produces the highest value in terms of utility or satisfaction, among a set of previously selected alternatives. The answer to this question involves a decision rule upon which subjects rely to make their choice. There are several decision rules that subjects could employ when answering choice tasks in DCEs. The assumption implicit in random utility models, as put forward since Lancaster (1966) and McFadden (1974), is that subjects' decisions respond to the compensatory heuristics, by which individual attributes are weighted by their contribution to overall utility in order to evaluate the relative utility of each profile, and therefore choose the one with the highest value. The implication is that subjects are able and willing to make trade-offs between attributes in order to determine the most preferred alternative. However, previous research in the sciences of decision making has shown that people often avoid making trade-offs among attributes (Kahneman and Frederick, 2002; Gowda and Fox, 2002; Payne et al., 1993), and that the use of non-compensating decision rules can be also a fully rational process (Payne et al., 1990). Nevertheless, while these choices are consistent with random utility models, they impose some challenges for modeling purposes. 1 As put by Sen (1987:69), the prevalence of this behaviour “indicates the case for making room for departures from the usual requirements of ‘rationality’ in under- standing actual behaviour”. 2 Few recent works have looked at this issue and have considered extensions of the random utility model that allow researchers to incorporate some decision process rules and/or minimize their impact on welfare estimations (see for instance Araña et al., 2008; Hensher and Rose, 2005). Ecological Economics 68 (2009) 2316–2326 ☆ The authors would like to thank the financial research support by projects BEC2000-0412, VEM2004-08558, and SEJ2005-09276 of the Spanish Ministry of Education. We would also like to thank Michael Hanemann, and Barbara Mellers for helpful comments. Suggestions by the editor and two anonymous reviewers of this journal also helped to shape the piece. Specially thanks to Jennifer Lerner for providing the lab materials for one of the experiments. Seminar participants at the XXIV European Environmental Economics Association Conference (Bremen, June 2005) and the Elicitation of Preferences group (London School of Economics, July 2005) also providing remarks that improved the manuscript. ⁎ Corresponding author. University of Las Palmas de Gran Canaria, Applied Economic Analysis (DAEA), Modulo D.3.05 Campus de Tafira s/n, 35017 Las Palmas de Gran Canaria, Las Palmas, Spain. Tel.: +34 928451795. E-mail address: jarana@daea.ulpgc.es (J.E. Araña). 1 As it was noted by a referee, readers should have in mind that the study of the use of non-compensatory decision rules has been tackled slightly different in the economic and psychology literature. Some nice reviews of both approaches are Spash (2000, 2007), and Girgenzer et al (1999). 2 As noted by a referee, some previous research have also claimed the use of deviations from standard economic models (i.e. noncompensatory heuristics) as pivotal elements to develop alternative understandings of environmental valuation and human behaviour in general (Aldred, 1997; Peacock, 1997; Spash, 2000; Vatn, 2001). 0921-8009/$ – see front matter © 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2009.03.003 Contents lists available at ScienceDirect Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon