Non‐transitive Choice: Event‐Splitting Effects or Framing Effects?

Recent studies have examined possible causes of the robust empirical failure of the transitivity axiom of expected utility theory by pitting regret aversion against alternative explanations such as event-splitting effects. These tests show that cycles replicate when the latter are controlled, but are sensitive to changes in problem representation. The control for event-splitting effects, however, does not rule out their contribution to cyclical choices in some circumstances. An experiment is reported which investigates this possibility. Cyclical choices are observed that cannot be due to event-splitting effects, but appear attributable to within-event and between-act evaluations of decision problems plus framing effects. Copyright 2001 by The London School of Economics and Political Science

[1]  R. Sugden,et al.  Some implications of a more general form of regret theory , 1987 .

[2]  David W. Harless.  Actions versus Prospects: The Effect of Problem Representation on Regret , 1992 .

[3]  Yun-Peng Chu,et al.  The Subsidence of Preference Reversals in Simplified and Marketlike Experimental Settings: A Note , 1990 .

[4]  Robert Sugden,et al.  OBSERVING VIOLATIONS OF TRANSITIVITY BY EXPERIMENTAL METHODS , 1991 .

[5]  M. Zeelenberg,et al.  Consequences of Regret Aversion: Effects of Expected Feedback on Risky Decision Making , 1996 .

[6]  R. Thaler,et al.  Laboratory experimentation in economics: The psychology of choice and the assumptions of economics , 1987 .

[7]  Charles A. Holt,et al.  Preference Reversals and the Independence Axiom , 1986 .

[8]  J. Neumann,et al.  Theory of games and economic behavior , 1945, 100 Years of Math Milestones.

[9]  R. Sugden,et al.  Does the Random-Lottery Incentive System Elicit True Preferences? An Experimental Investigation , 2016 .

[10]  Robert Sugden,et al.  Testing Alternative Explanations of Cyclical Choices , 1998 .

[11]  Robert Sugden,et al.  Testing for juxtaposition and event-splitting effects , 1993 .

[12]  Robert Sugden,et al.  An Axiomatic Foundation for Regret Theory , 1993 .

[13]  Alvin E. Roth,et al.  Laboratory experimentation in economics: List of contributors , 1987 .

[14]  A. Tversky,et al.  Support theory: A nonextensional representation of subjective probability. , 1994 .

[15]  A. Tversky,et al.  Prospect Theory : An Analysis of Decision under Risk Author ( s ) : , 2007 .

[16]  John D. Hey,et al.  Experiments in Economics , 1991 .

[17]  Steven J. Humphrey.  More mixed results on boundary effects , 1998 .

[18]  Robert Sugden,et al.  Preference Reversal: Information-Processing Effect or Rational Non-transitive Choice? , 1989 .