Three experiments are designed to test if the level of irrelevant prizes in the menu has a positive (assimilation) or negative (contrast) effect on the perceived valuation of target objects. Familiar field prizes and binary lotteries over such prizes are placed within “more-expensive” and “less-expensive” menus. Subjects fill-in a sequence of binary choice problems to reveal their preference between given cash and a designated prize from the menu. Between-subject comparisons reveal that the prize-level in the menu positively affects perceived valuations in spite of procedural attempts to rule out menu-dependent preferences and prohibit experimenter bias. The effect also shows within-subject in auction experiments: the price that subjects are willing to pay for given monetary lotteries significantly increases with the average payoff in the irrelevant-menu. The bias finally manifests even when subjects are led to choose the target lottery, independently, from the underlying menu.
