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Contextual deliberation and the choice-valuation preference reversal

Liang Guo

Journal of Economic Theory, 2021, vol. 195, issue C

Abstract: Revealed preferences between lotteries can be asymmetrically reversed across choice and valuation. The ongoing debate is whether the procedure-invariance principle is violated. This research presents a parsimonious theory to reconcile asymmetric preference reversals with procedure invariance. When risk attitude is ex ante imperfectly known, preference-eliciting procedures can endogenously influence revealed preferences through affecting the incentive for information retrieval/acquisition (i.e., deliberation). As predicted, when lottery pairing was known, experiment participants exhibited substantially less asymmetric reversals by stating mean-preserving and more dispersed valuations. Therefore, the endogeneity of asymmetric preference reversals can be substantiated.

Keywords: Choice; Deliberation; Preference reversal; Procedure invariance; Valuation (search for similar items in EconPapers)
JEL-codes: C91 D01 D11 D83 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jet.2021.105285

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