Preference Reversals Research Articles

Ecological momentary assessment of delay discounting, reward valuation, and craving in very light cigarette users.

Heightened delay discounting has been linked to adverse smoking cessation outcomes, including among light cigarette users. Few studies have evaluated delay discounting's proposed mechanism, preference reversal (concurrent increases in valuation of/craving for desired objects), and none have done so in naturalistic settings. We examined how person-level delay discounting moderated the within-person association between cigarette valuation and craving among very light daily cigarette users who were financially incentivized to abstain. Forty participants completed a baseline delay-discounting task and intermittent ratings of cigarette valuation and craving during the incentivized abstinence attempt. Subjects earned monetary rewards for abstinence on a descending schedule (e.g., $20 on Days 1 and 2 and $2.50 on Days 9 and 10). Consistent with preference reversals, there was a positive association between cigarette valuation and craving. This relation was moderated by delay discounting (stronger among those with low discounting rates) and by monetary reinforcement amount (stronger on days with low reinforcement). Additionally, subjects were more likely to report stronger cravings on days with high monetary reinforcement, with this effect moderated by delay discounting (stronger among those with low discounting rates). The results suggest that heightened delay discounting may not confer risk for preference reversal among very light daily cigarette users who are attempting abstinence.

How consumers process online hotel ratings

Online travel agencies commonly utilize 5-point and 10-point scales to display hotel ratings. When processing and comparing hotel ratings on different numerical scales (e.g., 4.1/5 vs. 8.4/10), what method(s) do consumers use? Through nine studies, this research shows that consumers tend to employ absolute differences (e.g., 5–4.1 vs. 10–8.4) or relative differences (e.g., 4.1 ÷ 5 vs. 8.4 ÷ 10) when making comparative judgments. Notably, the choice of method can lead to preference reversals. We further reveal that higher numeracy leads to greater reliance on relative differences. However, such an impact is attenuated under a utilitarian motive. Additionally, a greater promotion focus leads to greater reliance on absolute differences. The findings contribute to a more nuanced understanding of how consumers process hotel ratings.

Interpreting PPV and NPV of Diagnostic Tests with Uncertain Prevalence.

Medical decision-making is often uncertain. The positive predictive value (PPV) and negative predictive value (NPV) are conditional probabilities characterizing diagnostic tests and assessing diagnostic interventions in clinical medicine and epidemiology. The PPV is the probability that a patient has a specified disease, given a positive test result for that disease. The NPV is the probability that a patient does not have the disease, given a negative test result for that disease. Both values depend on disease incidence or prevalence, which may be highly uncertain for unfamiliar diseases, epidemics, etc. Probability distributions for this uncertainty are usually unavailable. We develop a non-probabilistic method for interpreting PPV and NPV with uncertain prevalence. Uncertainty in PPV and NPV is managed with the non-probabilistic concept of robustness in info-gap theory. Robustness of PPV or NPV estimates is the greatest uncertainty (in prevalence) at which the estimate's error is acceptable. Four properties are demonstrated. Zeroing: best estimates of PPV or NPV have no robustness to uncertain prevalence; best estimates are unreliable for interpreting diagnostic tests. Trade-off: robustness increases as error increases; this trade-off identifies robustly reliable error in PPV or NPV. Preference reversal: sometimes sub-optimal PPV or NPV estimates are more robust to uncertain incidence or prevalence than optimal estimates, motivating reversal of preference from the putative optimum to the sub-optimal estimate. Trade-off between specificity and robustness to uncertainty: the robustness increases as test-specificity decreases. These four properties underlie the interpretation of PPV and NPV. The PPV and NPV assess diagnostic tests, but are sensitive to lack of knowledge that generates non-probabilistic uncertain prevalence and must be supplemented with robustness analysis. When uncertainties abound, as with unfamiliar diseases, assessing robustness is critical to avoiding erroneous decisions.

The Physics of Preference: Unravelling Imprecision of Human Preferences through Magnetisation Dynamics

Paradoxical decision-making behaviours such as preference reversal often arise from imprecise or noisy human preferences. Harnessing the physical principle of magnetisation reversal in ferromagnetic nanostructures, we developed a model that closely reflects human decision-making dynamics. Tested against a spectrum of psychological data, our model adeptly captures the complexities inherent in individual choices. This blend of physics and psychology paves the way for fresh perspectives on understanding the imprecision of human decision-making processes, extending the reach of the current classical and quantum physical models of human behaviour and decision making.

Gender preference in China: A study with indirect utility function

The traditional view is that China is a strong son preference country, and some empirical studies support such view. We argue that demand for children, including sex of children, and family size, is the outcome of economic decisions in which social and economic factors could interact with gender preference. Thus, it is possible that strong social and economic factors counteract the strong son preference and lead to daughter preference. To investigate this possibility, we propose an indirect utility function approach and apply it to a recent Chinese data set. We find strong evidence on preference reversal as incomes and child rearing costs rise substantially for Chinese urban parents. Given that China is now a middle-income country and child rearing costs have skyrocketed during the last four decades, we find that Chinese parents with one child have little interest in rushing to have a second child. This does not bode well for the Chinese government’s programs to improve demographics.

Revealed Privacy Preferences: Are Privacy Choices Rational?

We investigate the extent to which trade-offs involving the sharing of personal information exhibit consistency with an underlying rational preference for privacy. In an experiment, people engage in trade-offs across two domains of personal information sharing, allowing us to classify whether their choices satisfy the generalized axiom of revealed preference. They also subsequently price the sharing of their personal information. Sixty-three percent of subjects act consistently with a rational preference ordering when allocating privacy levels, a level comparable to that observed in other domains. Individuals who are inconsistent when engaging in simple privacy trade-offs exhibit substantially more costly preference reversals when pricing personal information sharing. Only one-third of subjects exhibit consistency across both the selection of personal information to share and the pricing of such information sharing. Our results imply that monetizing personal information can have distinct welfare consequences for people with different degrees of rationality in their underlying ability to make sensible trade-offs involving personal information. We also provide evidence that preferences elicited over choices in our experiment correlate with real-world privacy behaviors. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: This work was supported by Forschungskredit (University of Zurich) [Grant FK-17-017] and Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung [Grant 174630] to Y.S. Lee. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00807 .

Correction to “Magnitude effects in preference reversals” by Lu and Nieznański (2021).

Correction to “Magnitude effects in preference reversals” by Lu and Nieznański (2021).

Consciously stochastic in preference reversals

Stochastic choice, the act of choosing differently in repeated decisions, can be a conscious decision made by individuals who are aware of their inability to make a definitive choice. To examine the prevalence and implications of conscious stochastic choice, we developed a novel method and implemented it in a preference reversal experiment: In each valuation choice between the bet and a varying reference option, subjects could either pay a small cost to select a specific option or opt for a free randomization choice where a computer randomly selects an option. Our findings revealed that the majority of subjects exhibited conscious stochastic choice, and further that their choices were significantly affected by the elicitation procedures.

Modelling Context Effects in Exit Choice for Building Evacuations

Understanding exit choice behaviour is essential for optimising safety management strategies in building evacuations. Previous research focused on contextual attributes, such as spatial information, influencing exit choice, often using utility models based on monotonic functions of attributes. However, during emergencies, evacuees typically make rapid, less calculated decisions. The choice of context can significantly impact the evaluation of attributes, leading to preference reversals within the same choice set but under varying context conditions. This cognitive psychological phenomenon, known as context effects, encompasses the compromise effect, the similarity effect, and the attraction effect. While researchers have long recognised the pivotal role of context effects in human decision making, their incorporation into computer-aided evacuation management remains limited. To address this gap, we introduce context effects (CE) in a social force (SF) model, CE-SF. Evaluating CE-SF’s performance against the UF-SF model, which considers only the utility function (UF), we find that CE-SF better replicates exit choice behaviour across urgency levels, highlighting its potential to enhance evacuation strategies. Notably, our study identifies three distinct context effects during evacuations, emphasising their importance in advancing safety measures.

Diet color affects female preference for mate color in the guppy Poecilia reticulata

It has been argued that a preexisting sensory bias for food color influences female mate preference for male ornament color. However, the effect of diet color over a short period on female preference for color-polymorphic male ornaments has not yet been investigated. In this study, we examined the effect of diet color on female preference for mate color in the guppy Poecilia reticulata, with color-polymorphic ornaments such as orange and black spots. From an early age, females were reared on a diet with orange and black color, respectively. A dichotomous mate choice experiment using females was conducted between males with large orange spots and males with large black spots. Females fed on an orange-colored diet preferred males with large orange spots, whereas those fed on a black-colored diet preferred males with large black spots. Afterward, the diet color treatment for the females was reversed for seven days. This dietary color alteration resulted in the reversal of female preference for male color. These results suggest that diet color has a great influence on female preference for mate color, even within a short period, and environmental gradients may function to maintain color-polymorphic male ornaments in this species.

Been There, Done That: The Impact of the Novelty of Penile Vaginal Intercourse (PVI) and Participants’ Sex on Delay and Probability Discounting of PVI

ABSTRACT Delay and probability discounting tasks are useful for understanding aspects of decision making. The current study, which employed a mixed-model design to assess discounting of penile-vaginal intercourse (PVI), was conducted online with male and female participants recruited from Prolific (N = 300; mean age = 34.1 years). Results of the novel delay and probability discounting tasks indicated that as the delay to PVI increased, or as PVI became less certain to occur, participants were instead more likely to choose to receive oral sex, the reward initially indicated as less desirable. Having previously engaged in PVI, however, enhanced this reversal of preferences on both tasks, which suggests PVI loses some of its value when no longer novel. Males and females similarly discounted PVI on the delay discounting task, which suggests biological sex may not impact the propensity to wait for a preferred sexual behavior. On the probability discounting task, however, males were more averse to a reduced probability of PVI occurring and instead opted for receiving oral sex. The sexual behavior discounting tasks developed in the current study, and ones like it, may prove useful for identifying preferences in sexual behaviors, and ultimately enhance sexual and relationship satisfaction.

Unifying Procedure-Dependent Preference Reversals: Theory and Experiments

Revealed preferences between alternatives can be systematically reversed across a variety of elicitation procedures (e.g., choice, valuation, matching, joint/separate evaluation). These puzzling findings have been usually invoked to challenge the procedure invariance principle. Yet procedure-dependent preferences can be endogenous. This paper presents a unifying theory of contextual deliberation to account for seemingly disparate phenomena of preference reversals. When attribute importance is ex ante imperfectly known, people can engage in costly information retrieval/acquisition activities (i.e., deliberation) prior to making decisions. Elicitation procedures can influence revealed preferences through affecting the incentive for deliberation. Therefore, contextual deliberation can endogenously yield procedure-dependent preference reversals, offer a common microfoundation for extant psychological accounts (e.g., the prominence hypothesis, the evaluability hypothesis), and coherently organize apparently unrelated/inconsistent findings in the literature. We also run five experiments and document new findings that are inconsistent with extant hypotheses but can be reconciled by contextual deliberation. This paper was accepted by Dmitri Kuksov, marketing. Funding: This work was supported by the Hong Kong Research Grant Council (RGC) General Research Fund [Grant 16500614]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2021.02640 .

Easier comparison of bets in evaluation does not reduce classical preference reversals: Evidence against a context-dependent explanation.

In preference reversals, subjects express different rankings over a set of alternatives depending on how preferences are elicited. In classical reversal tasks, for instance, subjects often select a safe bet over a risky one when given a choice between the two in a pair, but then assign a higher monetary evaluation to the risky bet. Motivated by a rich literature on context-dependent preferences, we conjecture that comparisons across bets in a pair can influence both Choice and Evaluation. Yet deciders are less likely to mentally compare the bets in the latter case, as bets are typically evaluated in isolation. This asymmetry between Choice and Evaluation is, we surmise, one cause of the reversals. If we further assume that memory decay affects mental comparisons in Evaluation, the account predicts order and timing effects on the reversal probability. We run several treatments designed to facilitate or hinder the retrieval from memory of the alternative bet during evaluation of a bet. However, the reversal rate does not vary across treatments in the predicted direction, and we find no systematic order or timing effects. We conclude that reversals are not influenced by the ease with which subjects recall the alternative bet during the evaluations, which suggests in turn that a relatively smaller frequency of comparisons across bets during the (typically isolated) evaluations is not a significant cause of reversals.

A simulation study on the probabilities of rank reversal, tie making, and tie breaking for multiple criteria decision making methods

Multiple criteria decision making (MCDM) methods can be affected by preference reversal, meaning that the order of two alternatives is reversed after adding or deleting another alternative. Here, we focus on methods that produce rankings with ties (i.e., weak orders). In this context, one usually talks about rank reversal. Existing rank reversal probability simulation experiments are subject to improvement on the following points: (1) the small number of MCDM methods included, (2) the unclear relation between the rank reversal probability and the rank of the deleted alternative, and (3) the lack of consideration of ties. In this paper, considering both strict preferences and ties, we distinguish two new phenomena: tie breaking, i.e., the shift from a tie to a strict preference, and tie making, i.e., the shift from a strict preference to a tie. To investigate the probabilities of rank reversal, tie making, and tie breaking, a simulation study involving thirty versions of twelve MCDM methods and six simulation factors is set up. Results demonstrate that for MCDM methods using pairwise comparison data, deleting an alternative ranked first or last leads to smaller probabilities than deleting an alternative in the middle, while the opposite holds for the methods using evaluation data under criteria. Four findings and three suggestions are given to help decision makers select MCDM methods to use.

Swiftonomics: Using Taylor Swift to Teach Supply and Demand, Exchange Rates, and Preference Reversals

Swiftonomics: Using Taylor Swift to Teach Supply and Demand, Exchange Rates, and Preference Reversals

A contextual range-dependent model for choice under risk

We introduce a context-dependent theory for choice under risk, called range utility theory. It builds on Parducci’s range principle from psychophysics and modifies expected utility by positing that risky prospects are evaluated relative to the range of consequences of all prospects in the decision context. When the context is fixed, choices typically exhibit the four-fold pattern of risk preferences, yet are fully consistent with expected utility (linear in probabilities) without invoking rank-principles. We illustrate this advantage in game theory contexts. As the same time, when the context varies, the relative value of an alternative also does, yielding different forms or preference reversals, some of which have been robustly documented.

Testing Nonmonotonicity in Health Preferences.

The main aim of this article is to test monotonicity in life duration. Previous findings suggest that, for poor health states, longer durations are preferred to shorter durations up to some threshold or maximum endurable time (MET), and shorter durations are preferred to longer ones after that threshold. Monotonicity in duration is tested through 2 ordinal tasks: choices and rankings. A convenience sample (n = 90) was recruited in a series of experimental sessions in which participants had to rank-order health episodes and to choose between them, presented in pairs. Health episodes result from the combination of 7 EQ-5D-3L health states and 5 durations. Monotonicity is tested comparing the percentage rate of participants whose preferences were monotonic with the percentage of participants with nonmonotonic preferences for each health state. In addition, to test the existence of preference reversals, we analyze the fraction of people who switch their preference from rankings to choices. Monotonicity is frequently violated across the 7 EQ-5D health states. Preference patterns for individuals describe violations ranging from almost 49% with choices to about 71% with rankings. Analysis performed by separate states shows that the mean rates of violations with choices and ranking are about 22% and 34%, respectively. We also find new evidence of preference reversals and some evidence-though scarce-of transitivity violations in choices. Our results show that there is a medium range of health states for which preferences are nonmonotonic. These findings support previous evidence on MET preferences and introduce a new "choice-ranking" preference reversal. It seems that the use of 2 tasks with a similar response scale may make preference reversals less substantial, although it remains important and systematic. Two procedures based on ordinal comparisons are used to elicit preferences: direct choices and rankings. Our study reports significant rates of nonmonotonic preferences (or maximum endurable time [MET]-type preferences) for different combinations of durations and EQ-5D health states.Analysis for separate health states shows that the mean rates of nonmonotonicity range from 22% (choices) to 34% (rankings), but within-subject analysis shows that nonmonotonicity is even higher, ranging from 49% (choices) to 71% (rankings). These violations challenge the validity of multiplicative QALY models.We find that the MET phenomenon may affect particularly those EQ-5D health states that are in the middle of the severity scale and not so much the extreme health states (i.e., very mild and very severe states).We find new evidence of preference reversals even using 2 procedures of a similar (ordinal) nature. Percentage rates of preference reversals range from 1.5% to 33%. We also find some (although scarce) evidence on violations of transitivity.

Analysis of the Relationship Between Learning and Entertainment from the Perspective of Behavioral Economics

Under the background of high and new technology increasingly becoming advanced productive forces, the world has put forward urgent requirements for high-quality talents. However, with the development of information technology, the increasingly abundant recreational activities seem to become an obstacle to students' learning, which greatly increases the difficulty of cultivating talents. In view of this phenomenon, this paper analyzes the relationship between learning and entertainment from the perspective of "entertainment first" social psychology and ARCS learning motivation model. It points out that entertainment occupies the learning time mainly because the different time span leads to the reversal of people's time preference. In the future, the government should speed up the popularization of mental health knowledge and strengthen the supervision of digital platforms; the society needs to establish more effective learning and evaluation mechanisms, promote individuals abilities to collect and process information using information technology, establish a more comprehensive learning reward system and attach importance to cultivating students self-discipline. These practical and effective measures will help promote balance between entertainment and learning and adapt to the trend of talent development in society.

Charting the evolution of research on the paradoxes in consumer choice—Systematic review and future research agenda

AbstractThe paradoxical findings in consumer choice research have captivated the interest of many scholars from diverse fields and transformed the understanding of consumer decision‐making. This paper is the first attempt to systematically review, synthesize, and integrate the paradoxical findings in consumer choice research. One of the first paradoxical findings was the violations of value maximation models of rational choice. The second important paradox in consumer choice research is the puzzling role of variety in consumer choices. We focus on these two critical paradoxes discovered in consumer choice literature over the last five decades and refer to them as the “paradox of rational choice” and the “paradox of variety.” We conducted a co‐citation cluster analysis to help identify the most significant studies in the domain. The cluster analysis helped eliminate the subjective bias in article selection. We also used inferential analysis to widen the scope of clusters to other relevant and especially recent studies. A review of 233 papers published between 1972 and 2023 reveals the four themes covering the two paradoxes of consumer choice. The first theme covers the first paradox: the paradox of rational choice. It presents research on preference reversals and other violations of value maximization rational choice models due to contextual factors and choice environment. The following three themes cover the second paradox of consumer choice: the paradox of variety. The second theme focuses on the benefits of variety and the natural desire of consumers to seek more variety. Paradoxically, the third theme highlights when and why variety will likely cause harmful psychological consequences for consumers. Finally, the last theme reconciles the opposing ideas of themes two and three by identifying the boundary conditions and suggesting ways to resolve this paradox. We also provide research directions that scholars can consider for future research related to each of these themes.

The Investigation into the Extent of Investors Irrationality Based on GARCH-M Model

Research in risk preference suggests that, in violation of economic man hypothesis, most investors are economically irrational, which is reflected through the phenomenon of preference reversal. However, there is a scant of study to measure the extent how irrational individuals are. Inspired by the way how efficient market is defined, this paper proposes a measurement of preference reversal and divides irrationality into two types. Furthermore, based on the data of market index and GARCH-M model, this paper finds that risk preference inconsistency always exists and investors in smooth time are weakly irrational.