"Preference Reversal' and the Observability of Preferences by Experimental Methods

Edi Karni and Zvi Safra

Econometrica, 1987, vol. 55, issue 3, 675-85

Abstract: This paper shows that: (1) the "preference reversal" phenomenon can be consistent with transitive preferences if these preferences violate the independence axiom of expected utility theory and (2) for the class of experiments that were used to produce the evidence concerning "preference reversal," the elicitation of certainty equivalents is possible if, and only if, the respondent's preferences can be represented by functionals that are linear in the probabilities. Furthermore, a more general class of experiments is not immune to "preference reversal" if nonexpected utility preferences are admitted. Copyright 1987 by The Econometric Society.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (131)

Downloads: (external link)
http://links.jstor.org/sici?sici=0012-9682%2819870 ... O%3B2-7&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:55:y:1987:i:3:p:675-85

Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues

Access Statistics for this article

Econometrica is currently edited by Guido Imbens

More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().