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Ratio Bias

Definition 1

The concept of ratio bias is rooted in our difficulties in dealing with proportions or ratios as opposed to absolute numbers. For example, when asked to evaluate two movie rental plans with a contracted scale (e.g. 7 and 9 new movies per week for Plans A and B, respectively) as opposed to an equivalent offering with an expanded scale (364 and 468 movies per year, respectively), consumers favor the better plan (Plan B) more in the scale expansion then contraction condition (Burson et al., 2009). This is because our experiential system—unlike the rational system—encodes information as concrete representations, and absolute numbers are more concrete than ratios or percentages (Kirkpatrick & Epstein, 1992). (See also framing, dual-system theory, affect heuristic.)

Source: Behavioral Economics

Definition 2

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