Consciously stochastic in preference reversals

Liu Shi (), Jianying Qiu (), Jiangyan Li and Frank Bohn ()
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Liu Shi: IMR, Radboud University
Jianying Qiu: IMR, Radboud University
Frank Bohn: IMR, Radboud University

Journal of Risk and Uncertainty, 2024, vol. 68, issue 3, No 3, 255-297

Abstract: Abstract Stochastic choice, the act of choosing differently in repeated decisions, can be a conscious decision made by individuals who are aware of their inability to make a definitive choice. To examine the prevalence and implications of conscious stochastic choice, we developed a novel method and implemented it in a preference reversal experiment: In each valuation choice between the bet and a varying reference option, subjects could either pay a small cost to select a specific option or opt for a free randomization choice where a computer randomly selects an option. Our findings revealed that the majority of subjects exhibited conscious stochastic choice, and further that their choices were significantly affected by the elicitation procedures.

Keywords: Stochastic choice; procedure invariance; preference reversals; incomplete preferences; imprecise preferences; deliberately stochastic (search for similar items in EconPapers)
JEL-codes: B40 C91 D81 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11166-024-09430-w

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