The Categorization of Continuous Attributes

Abstract

A continuous attribute (e.g., calorie count) can be classified into separate categories (e.g., high vs. low), and a similar attribute value can fall into different categories depending on where the category boundaries are drawn. This research explores the effect of categorization on judgments of options (e.g., products and incentive-compatible games) with continuous attributes. I predict and find a systematic preference shift between two options that were presented with different categorization criteria: When two options involve a tradeoff between two continuous attributes, people tend to prefer the option with both attributes classified into the favorable categories given the categorization criteria. I further show that this effect is driven by larger perceived differences between attribute values across category boundaries and is moderated by people's tendency to rely on category information. Overall, this effect holds even when people are highly familiar with the attributes and feel confident to make similarity evaluations, when people are cued that the categories provide little informational value, and when people are incentivized to make deliberate decisions. The findings in this research carry both theoretical and practical implications.