Inconsistent Trade-Offs Between Attributes: New Evidence in Preference Assessment Biases

Abstract

One of the fundamental postulates of rational choice is that preferences manifested by an individual towards alternatives should only depend on the merits of these alternatives and not on extraneous, irrelevant factors. Violations of this basic principle, so-called preference reversals, have puzzled researchers for over twenty years and raised concerns about the use of preference modeling in decision analysis. The present work seeks to further determine the nature of these phenomena, in particular the role played by response mode in certain types of preference reversals. Hershey and Schoemaker (1985) found Probability and Certainty Equivalents to differ systematically and attributed this difference to a framing effect. Here, we generalize their experimental design to control for framing effects and study biases on a larger scope. Our results show that biases do not disappear in the absence of framing, instead they reveal a clear and pervasive bias occurring under more controlled experimental conditions than previously known: direct trade-offs between two attributes X and Y are biased depending on whether X is traded off against Y, or Y traded off against X. From among several hypotheses, the data lend support to the general principle of compatibility (Tversky et al. 1988; Slovic et al. 1990), which implies that an attribute receives more relative weight when it is used as "currency" in trading off.decision analysis, utility theory, preference models, heuristics and biases

In search of a preferred preference elicitation method: A test of the internal consistency of choice and matching tasks

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“…However, there is much empirical evidence demonstrating that expected utility is not descriptively valid and that its violations generate upward biases in SG utilities. [4][5][6] Less is known about the effects of biases in the TTO measurements. Some recent articles have suggested that these biases might neutralize each other, 4 so that no systematic overall bias results.…”

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“…En esta línea, la utilidad es aquello cuya maximización sería compatible (se revela) con las acciones realizadas por los individuos (Samuelson, 1938). A nivel empírico, esta opción parte de que es más fácil medir acciones que estados subjetivos, pero también ha mostrado estar sujeta a sesgos cognitivos (Delquié, 1993;Farquhar, 1984; Schwand, Vetschera y Wakolbinger 2010; Tversky y Kahneman, 1974). A nivel conceptual, esta opción resta realismo a la utilidad, al reducirla a un supuesto de maximización (Li, Folmer y Xue 2014).…”