Reasoning about Outcome Probabilities and Values in Preference Reversals

Thinking and Reasoning, 5(2), 175-188, 1999

14 Pages Posted: 29 Sep 2012

See all articles by Marcus Selart

Marcus Selart

Norwegian School of Economics (NHH) - Department of Strategy and Management

Ole Boe

affiliation not provided to SSRN

Tommy Garling

University of Gothenburg

Date Written: 1999

Abstract

Research on preference reversals has demonstrated a disproportionate influence of outcome probability on choices between monetary gambles. The aim was to investigate the hypothesis that this is a prominence effect originally demonstrated for riskless choice. Another aim was to test the structure compatibility hypothesis as an explanation of the effect. The hypothesis implies that probability should be the prominent attribute when compared with value attributes both in a choice and a preference–rating procedure. In Experiment 1, two groups of undergraduates were presented with medical treatments described by two value attributes (effectiveness and pain-relief). All participants performed both a matching task and made preference ratings. In the latter task, outcome probabilities were added to the descriptions of the medical treatments for one of the groups. In line with the hypothesis, this reduced the prominence effect on the preference ratings observed for effectiveness. In Experiment 2, a matching task was used to demonstrate that probability was considered more important by a group of participating undergraduates than the value attributes. Furthermore, in both choices and preference ratings the expected prominence effect was found for probability.

Suggested Citation

Selart, Marcus and Boe, Ole and Garling, Tommy, Reasoning about Outcome Probabilities and Values in Preference Reversals (1999). Thinking and Reasoning, 5(2), 175-188, 1999, Available at SSRN: https://ssrn.com/abstract=2153807

Marcus Selart (Contact Author)

Norwegian School of Economics (NHH) - Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway
+47 55 95 96 95 (Phone)

Ole Boe

affiliation not provided to SSRN

Tommy Garling

University of Gothenburg ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

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