Testing the rate of preference reversal in personal and social decision-making

Adam Oliver

Journal of Health Economics, 2013, vol. 32, issue 6, 1250-1257

Abstract: Classic preference reversal, where choice and valuation procedures generate inconsistent preference orderings, has rarely been tested in hypothetical health care treatment scenarios. Two studies – the first non-incentivised and the second incentivised – are reported in this article. In both studies, respondents are asked to make decisions that affect themselves (a personal decision making frame) and those for whom they are responsible (a social decision making frame). The results show non-negligible and systematic rates of preference reversal in both frames, although these rates are slightly, but non-significantly, lower in the incentivised condition. Moreover, in both studies, the rate of predicted preference reversal was somewhat higher in the social than in the personal decision making frame, a finding that is explained by greater risk aversion when choosing treatment options for others than when choosing treatments for oneself.

Keywords: Preference reversals; Choice; Valuation; Personal preference; Social preference (search for similar items in EconPapers)
JEL-codes: C91 D81 I10 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:32:y:2013:i:6:p:1250-1257

DOI: 10.1016/j.jhealeco.2013.10.003

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