Risky Decision Making: Testing for Violations of Transitivity Predicted by an Editing Mechanism
Journal Title: Judgment and Decision Making - Year 2016, Vol 11, Issue 1
Abstract
Transitivity is the assumption that if a person prefers A to B and B to C, then that person should prefer A to C. This article explores a paradigm in which Birnbaum, Patton and Lott (1999) thought people might be systematically intransitive. Many undergraduates choose C = ($96, .85; $90, .05; $12, .10) over A = ($96, .9; $14, .05; $12, .05), violating dominance. Perhaps people would detect dominance in simpler choices, such as A versus B = ($96, .9; $12, .10) and B versus C, and yet continue to violate it in the choice between A and C, which would violate transitivity. In this study we apply a true and error model to test intransitive preferences predicted by a partially effective editing mechanism. The results replicated previous findings quite well; however, the true and error model indicated that very few, if any, participants exhibited true intransitive preferences. In addition, violations of stochastic dominance showed a strong and systematic decrease in prevalence over time and violated response independence, thus violating key assumptions of standard random preference models for analysis of transitivity.
Authors and Affiliations
Michael H. Birnbaum, Daniel Navarro-Martinez, Christoph Ungemach, Neil Stewart and Edika G. Quispe-Torreblanca
Keywords
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Intuition and affect in risk perception and decision making
gisela.boehm@psysp.uib.no
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