An experimental investigation of violations of transitivity in choice under uncertainty
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Several models of decision-making imply systematic violations of transitivity of preference. Our experiments explored whether people show patterns of intransitivity predicted by regret theory and majority rule. To distinguish “true” violations from those produced by “error,” a model was fit in which each choice can have a different error rate and each person can have a different pattern of true preferences that need not be transitive. Error rate for a choice is estimated from preference reversals between repeated presentations of that same choice. Our results showed that very few people repeated intransitive patterns. We can retain the hypothesis that transitivity best describes the data of the vast majority of participants.
KeywordsChoice Decision making Errors Regret theory Transitivity
JEL classificationC91 D81
We thank the editor and two referees for very helpful comments. Support was received from National Science Foundation Grants, SES 99–86436, and BCS-0129453.
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