Testing transitivity of preferences using linked designs
Journal Title: Judgment and Decision Making - Year 2012, Vol 7, Issue 5
Abstract
Three experiments tested if individuals show violations of transitivity in choices between risky gambles in linked designs. The binary gambles varied in the probability to win the higher (better) prize, the value of the higher prize, and the value of the lower prize. Each design varied two factors, with the third fixed. Designs are linked by using the same values in different designs. Linked designs allow one to determine if a lexicographic semiorder model can describe violations of transitivity in more than one design using the same parameters. In addition, two experiments tested interactive independence, a critical property implied by all lexicographic semiorder models. Very few people showed systematic violations of transitivity; only one person out of 136 showed violations of transitivity in two designs that could be linked by a lexicographic semiorder. However, that person violated interactive independence, as did the majority of other participants. Most individuals showed systematic violations of the assumptions of stochastic independence and stationarity of choice responses. That means that investigators should evaluate models with respect to response patterns (response combinations) rather than focusing entirely on choice proportions.
Authors and Affiliations
Michael H. Birnbaum and Jeffrey P. Bahra
Keywords
Related Articles
- EP ID EP678015
- DOI -
- Views 137
- Downloads 0
The devil you know: The effect of brand recognition and product ratings on consumer choice
Previous research on the role of recognition in decision-making in inferential choice has focussed on the Recognition Heuristic (RH), which proposes that in situations where recognition is predictive of a decision criter...
Reference-dependent preferences and loss aversion: A discrete choice experiment in the health-care sector
This study employs a Discrete Choice Experiment (DCE) in the health-care sector to test the loss aversion theory that is derived from reference-dependent preferences: The absolute subjective value of a deviation from a r...
Savings, subgoals, and reference points
Decision makers often save money for a specific goal by forgoing discretionary consumption and instead putting the money toward the savings goal. We hypothesized that reference points can be exploited to enhance this typ...
Bayesian methods for analyzing true-and-error models
Birnbaum and Quispe-Torreblanca (2018) evaluated a set of six models developed under true-and-error theory against data in which people made choices in repeated gambles. They concluded the three models based on expected...
Revealed strength of preference: Inference from response times
Revealed preference is the dominant approach for inferring preferences, but it is limited in that it relies solely on discrete choice data. When a person chooses one alternative over another, we cannot infer the strength...