Intransitivity in the Small and in the Large

Sushil Bikhchandani and Uzi Segal

No 964, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We propose a model of local-regret behavior that allows the separation of regret behavior between random variables that are close to each other and between random variables that are far apart. This enables a reinterpretation of evidence related to intransitive behavior in the laboratory. When viewed through this paper’s analysis of regret, the laboratory evidence need not imply intransitive behavior for large risky decisions such as investment choices and insurance.

Keywords: Regret; intransitivity; local preferences; preference reversal (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2018-10-15, Revised 2021-04-29
New Economics Papers: this item is included in nep-ias
Note: previously circulated as "Regret in the Small and in the Large"
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Journal Article: Intransitivity in the small and in the large (2021)
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