Do preference reversals disappear when we allow for probabilistic choice?

Graham Loomes, Ganna Pogrebna

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)
51 Downloads (Pure)

Abstract

The “preference reversal phenomenon,” a systematic disparity between people’s valuations and choices, poses challenges for theory and policy. Using a very general formulation of probabilistic preferences, we show that the phenomenon is not mainly due to intransitive choice. We find a high degree of regularity within choice tasks and also within valuation tasks, but the two types of tasks appear to evoke very different cognitive processes, even when the experimental environment tries to minimise differences. We discuss possible implications for modelling and eliciting preferences.
Original languageEnglish
Pages (from-to)166-184
Number of pages19
JournalManagement Science
Volume63
Issue number1
Early online date14 Mar 2016
DOIs
Publication statusPublished - Jan 2017

Keywords

  • preference reversal phenomenon
  • probabilistic preferences
  • stochastic choice

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