Reference dependence arises due to contextual shifts in both perception and judgment

Reference dependence is a phenomenon where decisions about a current stimulus are biased by previously experienced, and currently irrelevant, stimuli. The ubiquity of reference dependence has been extensively documented. Yet, consensus on its computational origins remains elusive. Previous theoretic accounts have proposed that context influences behavior because it distorts our perception (how we experience the world), judgment (the standards against which we judge it) or action (how we respond to it). We carried out a series of carefully controlled experiments that pitted each of these proposals against one another by manipulating response bias and stimulus timing (Exp. 1), and jointly measuring decision bias and sensitivity (Exp. 2a-c) for decisions about stimulus lightness, size and numerosity. We found that reference dependence persists in the absence of influences stemming from action; it is attributable to contextual changes to both perception and judgment. Using computational modelling, we quantified the proportion of the reference dependence effect driven by each of those and found that it varies with stimulus type, with a relatively larger perception share for lower-level sensory stimulus properties like lightness. On average, more than half of the observed reference dependence effect size can be attributed to contextual changes to judgment. Understanding the computational mechanisms underlying reference dependence is critical for translational efforts to counterbalance the downstream, real-world consequences of this phenomenon.