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Research on preference reversals has demonstrated a disproportionate influence of outcome probability on choices between monetary gambles. The aim was to investigate the hypothesis that this is a prominence effect originally demonstrated for riskless choice. Another aim was to test the structure compatibility hypothesis as an explanation of the effect. The hypothesis implies that probability should be the prominent attribute when compared with value attributes both in a choice and a preference–rating procedure. In Experiment 1, two groups of undergraduates were presented with medical treatments described by two value attributes (effectiveness and pain-relief). All participants performed both a matching task and made preference ratings. In the latter task, outcome probabilities were added to the descriptions of the medical treatments for one of the groups. In line with the hypothesis, this reduced the prominence effect on the preference ratings observed for effectiveness. In Experiment 2, a matching task was used to demonstrate that probability was considered more important by a group of participating undergraduates than the value attributes. Furthermore, in both choices and preference ratings the expected prominence effect was found for probability.

This paper examines consumer preferences for the attributes of alternative sources of water supply in Chennai, based on a household survey where respondents were given the description of a set of options. Their decision to choose one of the options is examined using discrete choice models. Whether consumer preferences are hierarchical or lexicographic is also briefly examined. Access to a yard tap is considered to be a more important attribute than water quantity, quality and the provider (the private sector or public sector). In general, the estimated willingness to pay is substantially higher than the present monthly water expenditures. However, some consumers, specially those living in the peri-urban areas, do not seem to be willing to pay for water supply improvements. Among the plausible reasons are a lack of trust in the public utility or a manifestation of the equity politics in India (the peri-urban households claiming their entitlement to subsidized water), or the presence of preference reversal.

ABSTRACTThis paper presents a methodology for analyzing Analytic Hierarchy Process (AHP) rankings if the pairwise preference judgments are uncertain (stochastic). If the relative preference statements are represented by judgment intervals, rather than single values, then the rankings resulting from a traditional (deterministic) AHP analysis based on single judgment values may be reversed, and therefore incorrect. In the presence of stochastic judgments, the traditional AHP rankings may be stable or unstable, depending on the nature of the uncertainty.We develop multivariate statistical techniques to obtain both point estimates and confidence intervals of the rank reversal probabilities, and show how simulation experiments can be used as an effective and accurate tool for analyzing the stability of the preference rankings under uncertainty. If the rank reversal probability is low, then the rankings are stable and the decision maker can be confident that the AHP ranking is correct. However, if the likelihood of rank reversal is high, then the decision maker should interpret the AHP rankings cautiously, as there is a subtantial probability that these rankings are incorrect. High rank reversal probabilities indicate a need for exploring alternative problem formulations and methods of analysis.The information about the extent to which the ranking of the alternatives is sensitive to the stochastic nature of the pairwise judgments should be valuable information into the decision‐making process, much like variability and confidence intervals are crucial tools for statistical inference. We provide simulation experiments and numerical examples to evaluate our method.Our analysis of rank reversal due to stochastic judgments is not related to previous research on rank reversal that focuses on mathematical properties inherent to the AHP methodology, for instance, the occurrence of rank reversal if a new alternative is added or an existing one is deleted.

MOST MODELS OF CHOICE THREAT DECISIONS AS IF THEY OCCUR BUT ONCE. BUT PEOPLE ARE CONTINUALLY MAKING CHOICES, AND OFTEN THEY ARE ASKED TO MAKE SIMILAR CHOICES AT DIFFERENT TIMES. IT IS NOT UNUSUAL TO FIND CHOICE REVERSALS, IN WHICH A CHOICE MADE AT ONE TIME IS REVERSED AT ANOTHER. EVEN IF CHOICE REVERSALS DO NOT OCCUR, BECAUSE EXACTLY SIMILAR CHOICES SELDOM RECUR, GREAT INCONSISTENCIES IN CHOICE ACROSS TIME ARE READILY OBSERVABLE. TO EXPLAIN SUCH INCONSISTENCIES, IT SEEMS THAT ONE MUST POSTULATE EITHER A RAPID CHANGE IN PREFERENCES OR IRRATIONALITY (NOT MAKING A CHOICE BASED ON ONE'S PREFERENCES). THIS ARTICLE EXPLORES A ATTENTIVENESS TO PREFERENCES CAN SHIFT ABRUPTLY AS THE DECISIONAL CONTEXT CHANGES. SHIFTS IN ATTENTIVENESS, OFTEN ACCOUNT FOR CHOICE INCONSISTENCIES.

This book constitutes a theoretical inquiry into the reasons for convergence, divergence and, in a trade theoretic perspective, for a reversal of trade patterns. It describes various mechanisms determining factor rewards and the change of trade patterns of growing economies. Special attention is paid to the effects of internationally differing preferences, unequal factor accumulation, technological change and government intervention. The chapters of this book are in the tradition of the "new" growth and trade theory and elaborate novel results, especially with respect to factor rewards, convergence and trade patterns. It also contains appendices to the individual chapters deriving the results in the main text in a very explicit and informative way

It is well documented that the way a static choice task is "framed" can dramatically alter choice behavior, often leading to observable preference reversals. This framing effect appears to result from perceived changes in the nature or location of a person's initial reference point, but it is not clear how framing effects might generalize to performance on dynamic decision making tasks that are characterized by high workload, time constraints, risk, or stress. A study was conducted to examine the hypothesis that framing can introduce affective components to the decision making process and can influence, either favorably (positive frame) or adversely (negative frame), the implementation and use of decision making strategies in dynamic high-workload environments. Results indicated that negative frame participants were significantly impaired in developing and employing a simple optimal decision strategy relative to a positive frame group. Discussion focuses on implications of these results for models of dynamic decision making.

Cover -- Half-title page -- Title page -- Copyright page -- Contents -- Preface -- List of Contributors -- 1. Introduction to Experimental Economics -- I. A Brief History of Experimental Economics -- A. Early Experiments: 1930-1960 -- 1. Individual Choice and the Wallis-Friedman Critique -- 2. Game-Theoretic Hypotheses -- 3. Industrial Organization -- B. The 1960s to the Present -- II. The Uses of Experimentation -- III. Some Series of Experiments -- A. Prisoners' Dilemmas and Public Goods -- 1. The Prisoner's Dilemma -- a. Experiments versus Simulations: A Methodological Digression -- 2. The Free-Rider Problem in Public Goods Provision -- B. Coordination -- C. Bargaining Behavior -- D. Market Organization and Competitive Equilibrium -- 1. Repeated Double Auctions with Stationary Parameters -- 2. Some Policy-Oriented Comparisons of Market Rules -- 3. Information Aggregation: Markets as Forecasters -- E. Auction Markets and Disequilibrium Behavior -- 2. Some Other Auction Results -- a. Controlling Incentives: A Methodological Digression -- F. Individual Choice Behavior -- 1. Preference Reversals -- a. Alternative Theoretical Directions -- b. Market Behavior -- 2. Other Choice Phenomena -- 3. Why Haven't These Demonstrated Anomalies Swept Away Utility Theory? -- 4. Experimental Control of Individual Preferences -- a. The BDM Procedure for Measuring Reservation Prices -- b. Controlling Preferences with Monetary Payoffs -- c. Controlling for Unobserved Risk Preferences with Binary Lottery Payoffs -- (1) Preferences and Probabilities: A Historical Digression on Binary Lotteries and Related Experimental Designs -- d. To Control or Not to Control? Costs and Benefits -- Notes -- Bibliography -- 2. Public Goods: A Survey of Experimental Research -- I. Introduction -- A. A Simple Public Goods Experiment -- B. The Art of Experiment: Sensitivity and Control.