Sign Theory: A Non-Extensional Theory of Preference

57 Pages Posted: 15 Mar 2010 Last revised: 2 Apr 2010

See all articles by Shuyeu Lin

Shuyeu Lin

Minghsin University of Science and Technology (MUST)

Paul Slovic

Decision Research; University of Oregon - Department of Psychology

Date Written: 2003

Abstract

A non-extensional theory of preference, called Sign Theory, is proposed and tested. Sign Theory considers preference construction as an evidence-building process, in which local valuation of evidence combines additively to form a global judgment. At the heart of this treatment is the notion that local evaluation generates positive or negative valuation outcomes (signs). Thus, signs are building blocks for preference construction. Study 1 confirmed the notion that valuation processes are based on signs derived from reference points. Studies 2 and 3 demonstrated the robustness and importance of the sign-frequency effect, which shows that the attractiveness of an option is positively related to the number of the positive signs, but negatively related to the number of negative signs. Studies 4 and 5 were designed to reduce the sign-frequency effect. Study 4 provided information about attribute weights to help participants appreciate the part-whole relationship between partitioned attributes and summarized attributes. In Study 5, decision makers were clearly informed about the two display formats of the same information. Nevertheless, in both studies, the presence of sign-frequency effects remained evident.

Keywords: Sign Theory, reference point effects, sign-frequency effects, preference construction

Suggested Citation

Lin, Shuyeu and Slovic, Paul, Sign Theory: A Non-Extensional Theory of Preference (2003). Available at SSRN: https://ssrn.com/abstract=1565023 or http://dx.doi.org/10.2139/ssrn.1565023

Shuyeu Lin

Minghsin University of Science and Technology (MUST) ( email )

Hsinchu County
Taiwan

Paul Slovic (Contact Author)

Decision Research ( email )

1201 Oak Street, Suite 200
Eugene, OR 97401
United States
541-485-2400 (Phone)
541-485-2403 (Fax)

HOME PAGE: http://www.decisionresearch.org

University of Oregon - Department of Psychology ( email )

Eugene, OR 97403
United States
541-485-2400 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
33
Abstract Views
607
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information