The article Less Is Better: When Lowvalue Options Are Valued More Highly than High-value Options (J. Behav.

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The article “Less Is Better: When Lowvalue Options Are Valued More Highly than High-value Options” (J. Behav. Decis. Making 1998 107–121) describes several experiments pertaining to consumer behavior. In one experiment, 46 students were split into two groups: 23 who were shown 7 oz of ice cream in a 5-oz cup (the cup was overflowing) and 23 who were shown 8 oz of ice cream in a 10-oz cup (there was a lot of empty space left over). Each student was then asked, “What is the most you are willing to pay for a serving?” The researchers theorized that students would pay more, on average, for the overflowing cup even though it contained less ice cream.
a. Which is the correct method of analysis for this situation: the paired t test, or the two-sample t procedure from the previous section? Why?
b. The sample averages for the 7 oz and 8 oz groups were $2.26 and $1.66, respectively; information in the article suggests the corresponding standard deviations are $0.84 and $0.81, respectively. Test the researchers’ hypothesis at the α = .05 level. Indicate any assumptions required for your method to be valid.

c. In a second experiment, a different group of 23 students were shown both of the aforementioned ice cream cups, side by side. Each student then indicated how much s/he was willing to pay for each ice cream serving. Which is the correct method of analysis for this second experiment: the paired t test, or the two-sample t procedure from the previous section? Why?
d. It is hypothesized that under this condition, students will be willing to pay more for the 8 oz serving. Test this hypothesis at the .05 level using the following information: sample average for 7 oz serving = $1.56; sample average for 8 oz serving = $1.85; standard deviation of sample differences = $0.32. Indicate any assumptions required for your method to be valid.
e. Can you explain why the two experiments gave “opposite” results?

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Modern Mathematical Statistics With Applications

ISBN: 9783030551551

3rd Edition

Authors: Jay L. Devore, Kenneth N. Berk, Matthew A. Carlton

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