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Intransitivity in the small and in the large

Author

Listed:
  • Sushil Bikhchandani

    (UCLA Anderson School of Management)

  • Uzi Segal

    (Boston College)

Abstract

We propose a regret-based model that allows the separation of attitudes towards transitivity on triples of random variables that are close to each other and attitudes towards transitivity on triples that are far apart. This enables a theoretical reinterpretation of evidence related to intransitive behavior in the laboratory. When viewed through this paper’s analysis, the experimental evidence need not imply intransitive behavior for large risky decisions such as investment choices and insurance.

Suggested Citation

  • Sushil Bikhchandani & Uzi Segal, 2021. "Intransitivity in the small and in the large," Journal of Risk and Uncertainty, Springer, vol. 63(3), pages 257-273, December.
    • Handle: RePEc:kap:jrisku:v:63:y:2021:i:3:d:10.1007_s11166-021-09367-4
    DOI: 10.1007/s11166-021-09367-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Intransitivity; Regret; Local preferences; Preference reversal;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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