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A Tailor-Made Test of Intransitive Choice

Author

Listed:
  • Aurélien Baillon

    (Erasmus School of Economics, PO Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Han Bleichrodt

    (Erasmus School of Economics, PO Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Alessandra Cillo

    (Bocconi University and IGIER, 20136 Milan, Italy)

Abstract

This paper reports a new test of intransitive choice using individual measurements of regret- and similarity-based intransitive models of choice under uncertainty. Our test is tailor-made and uses subject-specific stimuli. Despite these features, we observed only a few intransitivities. A possible explanation for the poor predictive performance of intransitive choice models is that they only allow for interactions between acts. They exclude within-act interactions by retaining the assumption that preferences are separable over states of nature. Prospect theory, which relaxes separability but retains transitivity, predicted choices better. Our data suggest that descriptively realistic models must allow for within-act interactions but may retain transitivity.

Suggested Citation

  • Aurélien Baillon & Han Bleichrodt & Alessandra Cillo, 2015. "A Tailor-Made Test of Intransitive Choice," Operations Research, INFORMS, vol. 63(1), pages 198-211, February.
    • Handle: RePEc:inm:oropre:v:63:y:2015:i:1:p:198-211
    DOI: 10.1287/opre.2014.1329
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    Cited by:

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    2. Beccacece, Francesca & Borgonovo, Emanuele & Buzzard, Greg & Cillo, Alessandra & Zionts, Stanley, 2015. "Elicitation of multiattribute value functions through high dimensional model representations: Monotonicity and interactions," European Journal of Operational Research, Elsevier, vol. 246(2), pages 517-527.
    3. Michael H. Birnbaum & Lucy Wan, 2020. "MARTER: Markov True and Error model of drifting parameters," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 15(1), pages 47-73, January.
    4. Joaquín Gómez Miñambres & Mark Schneider, 2019. "Carrots and Sticks: Optimal Contracting with Skewness Preference and Ambiguity Aversion," Working Papers 19-02, Chapman University, Economic Science Institute.
    5. Mark Schneider, 2019. "A Bias Aggregation Theorem," Working Papers 19-03, Chapman University, Economic Science Institute.
    6. Jeeva Somasundaram & Enrico Diecidue, 2017. "Regret theory and risk attitudes," Journal of Risk and Uncertainty, Springer, vol. 55(2), pages 147-175, December.
    7. Florian H. Schneider & Martin Schonger, 2019. "An Experimental Test of the Anscombe–Aumann Monotonicity Axiom," Management Science, INFORMS, vol. 65(4), pages 1667-1677, April.
    8. Mark Schneider, 2016. "Dual Process Utility Theory: A Model of Decisions Under Risk and Over Time," Working Papers 16-23, Chapman University, Economic Science Institute.
    9. Diecidue, Enrico & Somasundaram, Jeeva, 2017. "Regret theory: A new foundation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 88-119.
    10. Francesca Beccacece & Emanuele Borgonovo & Greg Buzzard & Alessandra Cillo & Stanley Zionts, 2013. "Elicitation of Multiattribute Value Functions through High Dimensional Model Representations," Working Papers 495, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    11. repec:cup:judgdm:v:13:y:2018:i:3:p:217-236 is not listed on IDEAS
    12. repec:cup:judgdm:v:15:y:2020:i:1:p:47-73 is not listed on IDEAS
    13. Mark Schneider, 2018. "A Dual System Model of Risk and Time Preferences," Working Papers 18-18, Chapman University, Economic Science Institute.
    14. David J. Butler & Ganna Pogrebna, 2018. "Predictably intransitive preferences," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(3), pages 217-236, May.

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