(Over-)Optimism in Two-stage Choice

When facing multiple choice options, decision-makers often adopt a two-stage choice strategy. Specifically, they first select some options to form a consideration set (the screening stage), and then make a final choice among this set (the choice stage). Past research has shown that a piece of information may receive different weights in the screening stage versus the choice stage (Beach 1993; Chakravarti, Janiszewski, and Ülkümen 2006). However, past work has not examined how screening influences decision makers’ weighting of uncertainty. Many everyday decisions involve uncertainty, from choosing among new restaurants, to choosing among a set of risky investment plans. We investigate how anticipating to receive information during a two-stage decision process affects people’s preference for uncertain options. In two-stage decision processes, consumers may utilize and attend to different information in the choice stage versus the screening stage (Chakravarti, Janiszewski, and Ülkümen 2006). Additionally, decision-makers may search extra information after forming the consideration set (Ge, Haübl and Elrod 2012). In cases where the choice options involve uncertainty (such as new restaurants, investment plans, etc.), sometimes – but not always – the extra information obtained between the screening and the choice stage could (partially) resolve the uncertainty of the options. Thus, during a screening stage, decision-markers may feel that they will resolve uncertainty in the final choice stage.