"Bi-Matching": A New Preference Assessment Method to Reduce Compatibility Effects
AbstractPreference models and utility functions are often assessed by eliciting value trade-offs among attributes. Prior research has shown that trade-off judgments can be biased in systematic ways: for example, the attribute which is used as response receives more relative subjective weight, i.e. the so-called scale compatibility effects (Tversky et al. [Tversky, A., S. Sattath, P. Slovic. 1988. Contingent weighting in judgment and choice. Psych. Rev. 95 371--384.]). This paper proposes a new procedure to elicit value trade-offs called bidimensional matching, or "bi-matching", designed to alleviate this effect. Bi-matching differs from traditional trade-off judgments, in that both attributes are adjusted simultaneously to reach indifference judgments. Bi-matching is compared with simple matching and choice in four experimental studies, to measure preferences for lotteries and riskless multiattribute alternatives. The main results are: (1) bi-matching produces trade-offs intermediate between those derived from matching on the "more important" attribute and matching on the less important attribute, although closer to the former; (2) the trade-offs derived from choice reflect more relative weight on the more important dimension than those from bi-matching; (3) bi-matching appears to reduce response error compared to standard matching. These results are generally consistent with theoretical predictions. We discuss the normative question of which preference assessment method is preferable. The current results as a whole and the built-in features of the bi-matching procedure already position this elicitation method as a worthwhile alternative to traditional methods for helping decision-makers introspect and construct their value trade-offs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 43 (1997)
Issue (Month): 5 (May)
decision analysis; preferences; utility assessment; biases;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Han Bleichrodt & Jose María Abellán Perpiñán & Jose Luis Pinto-Prades & Ildefonso Méndez-Martínez, 2006.
"Resolving Inconsistencies in Utility Measurement under Risk: Tests of Generalizations of Expected Utility,"
06.19, Universidad Pablo de Olavide, Department of Economics.
- Han Bleichrodt & Jose Maria Abellan-Perpiñan & Jose Luis Pinto-Prades & Ildefonso Mendez-Martinez, 2007. "Resolving Inconsistencies in Utility Measurement Under Risk: Tests of Generalizations of Expected Utility," Management Science, INFORMS, vol. 53(3), pages 469-482, March.
- Han Bleichrodt & José María Abellán-Perpiñan & JoséLuis Pinto & Ildefonso Méndez-Martínez, 2005. "Resolving inconsistencies in utility measurement under risk: Tests of generalizations of expected utility," Economics Working Papers 798, Department of Economics and Business, Universitat Pompeu Fabra.
- Han Bleichrodt, 2002. "A new explanation for the difference between time trade-off utilities and standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 447-456.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.