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Testing Explanations of Preference Reversal: a Model

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Listed:
  • Yves Alarie
  • Georges Dionne

Abstract

When Cubitt, Munro and Starmer (2004) presented their new experimental investigation of preference reversal, they pointed out that their test results cannot be explained by any of the best-known explanations proposed by economists and psychologists. In this paper we propose a model based on lotteries qualities to explain these new test results.

Suggested Citation

  • Yves Alarie & Georges Dionne, 2005. "Testing Explanations of Preference Reversal: a Model," Cahiers de recherche 0510, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0510
    as

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    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2005/CIRPEE05-10.pdf
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    References listed on IDEAS

    as
    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    2. Yves Alarie & Georges Dionne, 2006. "Lottery qualities," Journal of Risk and Uncertainty, Springer, vol. 32(3), pages 195-216, May.
    3. Tversky, Amos & Slovic, Paul & Kahneman, Daniel, 1990. "The Causes of Preference Reversal," American Economic Review, American Economic Association, vol. 80(1), pages 204-217, March.
    4. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    5. Gregory W. Fischer & Ziv Carmon & Dan Ariely & Gal Zauberman, 1999. "Goal-Based Construction of Preferences: Task Goals and the Prominence Effect," Management Science, INFORMS, vol. 45(8), pages 1057-1075, August.
    6. Robin P. Cubitt & Alistair Munro & Chris Starmer, 2004. "Testing explanations of preference reversal," Economic Journal, Royal Economic Society, vol. 114(497), pages 709-726, July.
    7. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    8. Drazen Prelec, 1998. "The Probability Weighting Function," Econometrica, Econometric Society, vol. 66(3), pages 497-528, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Standard preference reversal; counter preference reversal; choice task; money valuation task; probability valuation task; lottery; test;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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