American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Imprecision as an Account of the Preference Reversal Phenomenon
American Economic Review
vol. 97,
no. 1, March 2007
(pp. 277–297)
Abstract
Many individuals' choices and valuations involve a degree of uncertainty/imprecision. This paper reports an experiment designed to obtain some measure of imprecision and to examine the extent to which it can explain preference reversals of two opposite forms, one of which appears not to have been reported previously. The model of imprecision we examine not only predicts both patterns but also provides an account of earlier results that are otherwise not well explained. The results suggest that any successful descriptive theory of choice and valuation will need to allow in some way for the imprecision surrounding people's decisions. (JEL C91, D11, D81)Citation
Butler, David, J., and Graham C. Loomes. 2007. "Imprecision as an Account of the Preference Reversal Phenomenon." American Economic Review, 97 (1): 277–297. DOI: 10.1257/aer.97.1.277Additional Materials
JEL Classification
- C91 Design of Experiments: Laboratory, Individual
- D11 Consumer Economics: Theory
- D81 Criteria for Decision-Making under Risk and Uncertainty