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Dynamic Preference "Reversals" and Time Inconsistency

Author

Listed:
  • Philipp Strack
  • Dmitry Taubinsky

Abstract

We study the possibility of identifying time-inconsistent preferences in empirical designs where preferences are elicited in advance at time 0 and then again at time 1, after the agent receives additional information. For single-peaked preferences, time consistency is rejected only when the time-1 ranking between a pair of alternatives is always the reverse of the time-0 ranking. We establish variations and generalizations of this result. Since such stark reversals are rarely observed, choice-revision designs require stronger identification assumptions than perhaps previously appreciated. But we show that time inconsistency is identifiable in environments where preferences over alternatives can be "priced out."

Suggested Citation

  • Philipp Strack & Dmitry Taubinsky, 2026. "Dynamic Preference "Reversals" and Time Inconsistency," American Economic Journal: Microeconomics, American Economic Association, vol. 18(2), pages 426-468, May.
    • Handle: RePEc:aea:aejmic:v:18:y:2026:i:2:p:426-68
    DOI: 10.1257/mic.20230120
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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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