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Testing the rate of preference reversal in personal and social decision-making

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  • Oliver, Adam

Abstract

Classic preference reversal, where choice and valuation procedures generate inconsistent preference orderings, has rarely been tested in hypothetical health care treatment scenarios. Two studies – the first non-incentivised and the second incentivised – are reported in this article. In both studies, respondents are asked to make decisions that affect themselves (a personal decision making frame) and those for whom they are responsible (a social decision making frame). The results show non-negligible and systematic rates of preference reversal in both frames, although these rates are slightly, but non-significantly, lower in the incentivised condition. Moreover, in both studies, the rate of predicted preference reversal was somewhat higher in the social than in the personal decision making frame, a finding that is explained by greater risk aversion when choosing treatment options for others than when choosing treatments for oneself.

Suggested Citation

  • Oliver, Adam, 2013. "Testing the rate of preference reversal in personal and social decision-making," Journal of Health Economics, Elsevier, vol. 32(6), pages 1250-1257.
    • Handle: RePEc:eee:jhecon:v:32:y:2013:i:6:p:1250-1257
    DOI: 10.1016/j.jhealeco.2013.10.003
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    References listed on IDEAS

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    Cited by:

    1. Adam Oliver, 2018. "Your money and your life: Risk attitudes over gains and losses," Journal of Risk and Uncertainty, Springer, vol. 57(1), pages 29-50, August.
    2. Sebastian Neumann-Böhme & Stefan A. Lipman & Werner B. F. Brouwer & Arthur E. Attema, 2021. "Trust me; I know what I am doing investigating the effect of choice list elicitation and domain-relevant training on preference reversals in decision making for others," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(5), pages 679-697, July.
    3. Oliver, Adam, 2018. "Your money and your life: risk attitudes over gains and losses," LSE Research Online Documents on Economics 88583, London School of Economics and Political Science, LSE Library.
    4. José Luis Pinto‐Prades & Fernando Ignacio Sánchez‐Martínez & José María Abellán‐Perpiñán & Jorge E. Martínez‐Pérez, 2018. "Reducing preference reversals: The role of preference imprecision and nontransparent methods," Health Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 1230-1246, August.
    5. Takuro Uehara & Yoko Nagase & Wayne Wakeland, 2016. "Integrating Economics and System Dynamics Approaches for Modelling an Ecological–Economic System," Systems Research and Behavioral Science, Wiley Blackwell, vol. 33(4), pages 515-531, July.
    6. Afschin Gandjour & Dimitrios Kourouklis, 2020. "A survey analyzing assumptions for rational decision making in health care," Economics Bulletin, AccessEcon, vol. 40(1), pages 828-836.

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    More about this item

    Keywords

    Preference reversals; Choice; Valuation; Personal preference; Social preference;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I10 - Health, Education, and Welfare - - Health - - - General

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