Predictably Intransitive Preferences

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

External organisations

  • Griffith University

Abstract

The transitivity axiom is common to nearly all descriptive and normative utility theories of choice under risk. Contrary to both intuition and common assumption, the little-known ’Steinhaus-Trybula paradox’ shows the relation ’stochastically greater than’ will not always be transitive, in contradiction of Weak Stochastic Transitivity. We bespoke-design pairs of lotteries inspired by the paradox, over which individual preferences might cycle. We run an experiment to look for evidence of cycles, and violations of expansion/contraction consistency between choice sets. Even after considering possible stochastic but transitive explanations, we show that cycles can be the modal preference pattern over these simple lotteries, and we find
systematic violations of expansion/contraction consistency.

Details

Original languageEnglish
Pages (from-to)217-236
Number of pages20
JournalJudgment and Decision Making
Volume13
Issue number3
Publication statusPublished - 1 May 2018

Keywords

  • intransitivity cycles, intransitility, cycles, expansion consistency, lotteries