Magnitude effects in preference reversals.

AbstractOne core assumption of standard economic theory is that an individual’s preferences are stable, irrespective of the method used to elicit them. This assumption may be violated if preference reversals are observed when comparing different methods to elicit people’s preferences. People may then prefer A over B using one method while preferring B over A using another. Such preference reversals pose a significant problem for theoretical and applied research. We used a sample of medical and economics students to investigate preference reversals in the health and financial domain when choosing patients/clients. We explored whether preference reversals are associated with domain-relevant training and tested whether using guided ‘choice list’ elicitation reduces reversals. Our findings suggest that preference reversals were more likely to occur for medical students, within the health domain, and for open-ended valuation questions. Familiarity with a domain reduced the likelihood of preference reversals in that domain. Although preference reversals occur less frequently within specialist domains, they remain a significant theoretical and practical problem. The use of clearer valuation procedures offers a promising approach to reduce preference reversals.

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Preference reversals and effects of D-amphetamine on delay discounting in rats

Behavioural Pharmacology ◽

10.1097/fbp.0b013e32835342ed ◽

2012 ◽

Vol 23 (3) ◽

pp. 228-240 ◽

Cited By ~ 16

Author(s):

Christopher A. Krebs ◽

Karen G. Anderson

Keyword(s):

Delay Discounting ◽

Preference Reversals

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The fragile nature of contextual preference reversals: Reply to Tsetsos, Chater, and Usher (2015).

Psychological Review ◽

10.1037/a0039656 ◽

2015 ◽

Vol 122 (4) ◽

pp. 848-853 ◽

Cited By ~ 16

Author(s):

Jennifer S. Trueblood ◽

Scott D. Brown ◽

Andrew Heathcote

Keyword(s):

Preference Reversals

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Preference Reversals

The New Palgrave Dictionary of Economics ◽

10.1057/978-1-349-95189-5_1692 ◽

2018 ◽

pp. 10635-10639

Author(s):

Chris Starmer

Keyword(s):

Preference Reversals

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Rational Choosers

Modern Social Contract Theory ◽

10.1093/oso/9780198853541.003.0005 ◽

2020 ◽

pp. 103-128

Author(s):

Albert Weale

Keyword(s):

Rational Choice ◽

Central Element ◽

Empirical Literature ◽

Independence Axiom ◽

Single Individual ◽

Preference Reversals ◽

Important Distinction ◽

Veil Of Ignorance ◽

Average Utility ◽

The Veil

From some points of view, Harsanyi stands apart from other theorists discussed in this book. He was a utilitarian, and he focuses on the hypothetical choices of a single individual. Nevertheless, his construction has been influential, and he has good claim to be the founder of the device of the veil of ignorance. He uses the orthodox utility theory of rationality to show that behind a veil of ignorance in which a hypothetical individual had an equal chance of being anyone in society, rationality would lead to that person adopting the principle of maximizing average utility. Utilitarianism can be represented as the maximizing choice of a rational individual behind the veil of ignorance. A central element in Harsanyi’s construction is the idea of ethical individualism, which he holds is captured in an axiom of independence defining the rationality of choice. He also revives the idea of the interpersonal comparability of utility. His reliance on interpersonal comparisons is a potential point of criticism, as is the argument that, strictly speaking, he has not shown that utilitarianism is required, as distinct from merely being consistent with, his principles of rational choice. A more fundamental criticism is that the phenomenon of preference reversals, well established in empirical literature, call into question the independence axiom. Preference reversals are intelligible. In relation to some cases, they suggest too an important distinction between rational choice and prudent choice.

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