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AbstractIntertemporal preference reversals occur when individuals choose future option A over future option B in a direct choice between the two but place a higher 'immediate cash' value on B than on A. Tversky et al. (1990) reported strong evidence of such reversals, which they attributed mainly to valuation biases rather than intransitivity. We find similar levels of reversals, even after adjusting for considerable degrees of variability and imprecision in people's responses. However, we disagree with Tversky et al.'s conclusions about the causes of the majority of these reversals. We find substantial levels of intransitivity in respondents' binary choices as well as differential overvaluation of both options relative to the values inferred from their choices.

Abstract
A fundamental contribution of consumer behavior research is to help marketing scholars develop an understanding of how people think about and express their preferences. In this article we find that two commonly used preference elicitation procedures, willingness to pay (WTP) and choice, are consistently associated with different expressed preferences. Specifically, choices are associated with a relatively greater preference for hedonic goods, while WTP is associated with a relatively greater preference for utilitarian goods. We find that this is caused, in part, by the greater reliance on deliberation in determining WTP values, while preferences in choices are determined by an affect heuristic. Unlike other choice and WTP preference reversals, we find that this effect is not caused by mechanical determinants such as scale compatibility, as the effect persists with continuous scale measures that rely on affect and with choice-based scale measures that rely on determining valuation.

The possibility of preference reversals according to the Kaldor-Hicks (KH) criterion in benefit-cost analysis has concerned economists since Scitovsky (1941) first published his results. Lawyers and philosophers have argued that the potential of reversals calls the use of benefit-cost analysis into question, implying elimination of its use. We demonstrate that reversals occur only with inferior goods in the case of static production possibilities and that reversals occur under changing production possibilities only when production possibilities frontiers cross, which is a myopic characterization that ignores practical cases of global production possibilities.