Tom Sawyer and the Construction of Value

21 Pages Posted: 11 Aug 2005

See all articles by Dan Ariely

Dan Ariely

Duke University - Fuqua School of Business

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Drazen Prelec

Massachusetts Institute of Technology (MIT) - Sloan School of Management; MIT Department of Economics; MIT Brain and Cognitive Sciences

Date Written: July 2005

Abstract

This paper challenges the common assumption that economic agents know their tastes. After reviewing previous research showing that valuation of ordinary products and experiences can be manipulated by non-normative cues, we present three studies showing that in some cases people do not even have a pre-existing sense of whether an experience is good or bad - even when they have experienced a sample of it.

Keywords: Preferences, preference uncertainty, coherent arbitrariness

JEL Classification: D00

Suggested Citation

Ariely, Dan and Loewenstein, George F. and Prelec, Drazen, Tom Sawyer and the Construction of Value (July 2005). FRB of Boston Working Paper No. 05-10. Available at SSRN: https://ssrn.com/abstract=774970 or http://dx.doi.org/10.2139/ssrn.774970

Dan Ariely (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
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(919) 381-4366 (Phone)

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

Drazen Prelec

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E40-161
MIT
Cambridge, MA 02142
United States
617-253-2833 (Phone)

MIT Department of Economics ( email )

Department of Economics
E52-371
Cambridge, MA 02142
United States

MIT Brain and Cognitive Sciences ( email )

43 Vassar Street
Cambridge, MA 02139
United States

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