Response-Modes And Inconsistencies In Preference Assessments

Abstract

This study uncovers the generality and pervasiveness of so-called response-mode effects in preference elicitation. Adjusting X and adjusting Y in matching pairs of two-dimensional alternatives [X,Y] do not produce equivalent indifference relations, as logic would dictate. The discrepancy between certainty and probability equivalents studied by Hershey and Schoemaker (1985) appears to be a particular case of a general phenomenon. However, Hershey and Schoemaker’s interpretation of this discrepancy is not applicable to the general case.

In light of this evidence, we reexamine the conclusions of earlier studies of utility assessment methods. The results of new experiments show that the dependence of utility functions on probability is associated with the elicitation of X-responses rather than a certainty effect as previously proposed.

Our findings can be simply described as an overweighting of the response dimension, which could be further explained as the result of an anchoring and adjustment heuristic.

The fact that indifference relations of the type [X₁Y₁] ~ [X₂, Y₂] depend systematically on the response mode used to establish them is a disturbing violation of invariance which poses a serious problem to any utility assessment method based on matching, that is to say most of them.