Psychology of Preference Reversals and Prominence Hypothesis

Chapter 3 introduced the experimental research of[aut]Tversky, A. (Tversky et al. in American Economic Review, 80, 204–217, 1990), arguing that the preference reversal phenomenonPreference reversal phenomenon can be interpreted as a deviation from procedural invarianceDeviation from procedural invariance. A deviation from procedural invarianceProcedural invariance refers to a trait by which preference is reversed by preferencePreference revelation procedures[aut]Tversky, A.. Tversky et al. asserted that the preference reversal phenomenonPreference reversal phenomenon was explainable by partial modification of expected utility theoryExpected utility theory such as transitivityTransitivity and independence axiomIndependence axiom. This chapter will describe the prominence hypothesisProminence hypothesis as a psychological interpretation of this phenomenon and the contingent-weighting model[aut]Slovic, P. (Slovic et al. in Insights in decision making: A tribute to Hillel J Einhorn, University of Chicago Press, 1990; Tversky et al. in Psychological Review, 95, 371–384, 1988) of[aut]Tversky, A. the specific representation of the hypothesis and introduce some experiments related to the model.