Choice/Matching Preference Reversals in Groups: Consensus Processes and Justification-Based Reasoning

Individual preferences can vary significantly by the mode in which they are elicited. Thus, the seemingly benign procedural issue of elicitation mode (i.e., choice, buying price, rating, matching) could have a profound effect on group decisions, although elicitation mode has not been much studied as a group procedural variable. Individual preferences differ by elicitation mode when the elicitation contexts differentially emphasize particular aspects of the decision. Emphasis on explainability, for example, may produce decisions that are based only on a few, important, attributes. Because group consensus processes also can encourage particular reasoning strategies, grouping may interact with elicitation mode; that is, group consensus processes may moderate or exacerbate preference reversals. The present study explored a particular elicitation effect, choice versus matching preference reversals, for decisions with both low and high social significance. The results confirmed both that elicitation mode can affect group decisions and that group consensus processes moderate choice/matching preference reversals. Further, evidence from both preference measures and rating scales suggested that the moderation was due to an increase in easily defended, justifiable decisions. Social significance did not affect individual or group decisions, but decreased members′ post group commitment to the group decision. These results have implications both for group decision making and for the study of the role of explanation-based strategies in preference formation.     

Linking together different measures of preference: A dynamic model of matching derived from decision field theory

Two frequently used tasks for measuring preferences among gambles are choice and selling price tasks. However, the rank orders observed with these tasks do not agree, and these disagreements are called preference reversals. In this article, we propose an extension of decision field theory that was originally designed to account for choice probability and the distribution of choice response times. In this extension, we show how this same theory can be used to derive predictions for the distribution of values produced by selling price tasks. This model not only accounts for the basic preference reversal results but also can explain the effects of various information processing factors on preference reversals including time, effort, and practice. We conclude by summarizing the advantages of the decision field matching model over two earlier models of choice and selling prices—expression theory and the contingent weighting model.     

Simplified approaches for multicriteria decision making under uncertainty

The problem of uncertainty in the outcome of decisions has tended to be glossed over by many MCDM methods, with the exception of multiattribute utility theory (MAUT). MAUT does, however, require quite complicated preference elicitations and knowledge of the full multivariate distribution of outcomes. Results from a series of simulation studies indicate that the preference orderings of MAUT are only minimally changed when using a simple additive aggregation of marginal utilities, especially in relation to the natural imprecisions inherent in preference elicitation. It is shown in the simulations that by far the most critical aspect of multicriteria decision analysis under uncertainty is not the form of aggregation, but the correct elicitation of marginal utilities which properly represent decision maker preferences over gambles. We relate the results obtained here to other results on the approximation of distributions by three- or five-point discrete distributions, and suggest that the use of deterministic MCDM methods of any form (not necessarily value function techniques), applied to an extended formulation in which each criterion measure is repeated for three or five ‘scenarios’, can be justified.     

Rank disagreement: A comparison of multi-criteria methodologies

A number of multi-criteria decision support techniques have emerged in recent years that use varying computational approaches to arrive at the most desirable solution and thereby ‘recommend’ a course of action. Decision makers who use the results of this analytic work should be assured that the computational schemes used by their supporting analysts or decision support software produce the appropriate solutions. We conducted a series of simulation experiments that compared the top-ranked options resulting from the computational algorithms that support Multi-Attribute Value Theory (MAVT) and three methods that are reported in the literature that allow rank reversals, the change in rank order of two options when an unrelated option is added or deleted from the analysis: the Analytical Hierarchy Process (AHP), Percentaging and the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). We also included a Fuzzy algorithm proposed by Yager to gauge its consistency with the other algorithms, even though it is not subject to rank reversals. These experiments demonstrated that the MAVT and AHP techniques, when provided with the same decision outcome data, very often identify the same alternative as ‘best’. The other techniques are noticeably less consistent with MAVT, the Fuzzy algorithm being the least consistent. The situations under which the most frequent and significant differences occurred were dependent upon the method. The results of our experiments indicate that other issues (e.g. the processes used for problem structuring and the elicitation of value weights) are likely to be of greater significance to problem outcome (based on our experience) than the choice between the computational algorithms of MAVT and AHP. The results cause us to be concerned about the use of the other methods.     

Robustness of Additive Value Function Methods in MCDM

A simulation model is constructed of choice between a discrete number of non-dominated alternatives. The long-run goals of the decision maker are assumed to be consistent with a hypothetical preference structure which satisfies assumptions of completeness, transitivity and additive independence for an ideal set of criteria. The use of additive value functions to aid the decision maker in this choice is simulated for a variety of contexts and under a number of non-idealities such as the omission of criteria, confounding of criteria and inconsistent responses. It is found that ideal preference orderings are well identified by additive value functions provided that the non-idealities are moderate and that sufficient effort is put into modelling changing marginal values for different levels of performance. One of the potentially most sensitive areas is that of shifts in the decision maker's reference points as a result of the types of preference information asked.     

Preference reversals are diminished when gambles are presented as relative frequencies

Preference reversals are a well-documented example of suboptimal decision making. Typical preference reversals experiments have involved monetary bets presented in probability format. Research on other examples of decision making have shown that irrational or suboptimal choices are diminished or eliminated entirely when the probabilities are presented as relative frequencies (e.g., Gigerenzer & Hoffrage, 1995). The aim of the present experiment was to determine if the way in which information is presented to participants affects participants' preferences. When the options were presented in the standard probability format 59% of participants' preferences were reversed. However, reversals were significantly decreased in the frequency format group, with only 40% of participants' responses being inconsistent. Although preference reversals were not eliminated when the gambles were presented as frequencies they were significantly diminished and may not be such a robust example of irrational decision making after all.     

Information displays and preference reversals

Preference reversals occur when a decision maker prefers one option to another in one response mode but reverses that ordering when preferences are elicited in another response mode. We report the results of two experiments which significantly impact the frequency of preference reversals. Specifically, when the probabilities are displayed in a format which appears harder to process, the frequency of reversals is increased. Process-tracing evidence suggests that decision-makers also shifted information processing strategies as a function of information format. We discuss the implications for theories of preference reversals and strategy selection, and for the design of information displays.     

Stating Preference for the Ethereal but Choosing the Concrete: How the Tangibility of Attributes Affects Attribute Weighting in Value Elicitation and Choice

Marketers routinely make use of stated consumer preferences and the relative attribute‐importance weights implied by these preferences when making decisions on issues such as advertising messages and product design. Using this information as a basis for managerial decision making is risky, though, if stated preferences diverge from actual choices. Practical evidence that such a divergence is of concern is provided by the current trend toward the use of stated choice‐based conjoint analysis. This article examines differences between the attribute‐importance weights consumers use during value elicitation and the attribute weights revealed to influence actual choice. The results of an empirical analysis of automobile stated preference and purchase decisions, and an experiment and subsequent qualitative analysis of wine choice, converge to suggest that consumers’ attribute weightings differ in value elicitation versus choice in a reliable manner. Specifically, we demonstrate a tangibility effect—the tendency for tangible attributes to be weighted relatively more heavily than intangible attributes in choice as compared to in value elicitation. The process underlying the tangibility effect is discussed, as are the implications for researchers and managers.     

“金钱-环境”复合收益的风险决策:价值取向的影响

现实中的环境决策,往往要在多个由"金钱-环境"复合而成的结果间做选择。人们如何对异质复合结果进行评估与选择,是决策研究面临的新课题。本研究着重考察个体金钱取向和环境取向的相对强度对复合收益风险决策的影响。结果表明,无论是采用自陈量表(实验1)或内隐联想测验(实验2)来测量价值取向,还是采用混词造句任务(实验3)来启动价值取向,均发现价值取向相对强度对复合风险决策有显著影响。(1)相比于金钱取向占优的个体,环境取向占优的个体在进行复合风险决策时更偏好环境风险较小的复合选项;(2)在复合选项等价匹配任务中,环境取向占优的个体会赋予复合选项中的环境收益以更高权重,倾向于用更多的金钱收益来弥补环境收益的风险折扣;(3)在复合收益风险概率匹配任务中,环境取向占优的个体更倾向于为获取倍增的环境收益而承担更大的复合收益风险。作为对复合结果风险决策的首次探索,本研究初步回答了不同价值取向的个体在金钱-环境复合风险决策中更倾向于规避什么风险、拿什么冒险以及为什么冒险等问题,为今后进一步开展复合决策研究打下了理论和方法基础。     

Are preference reversals reduced when made explicit?

Previous research has shown that preferences for options, such as gambles, can reverse depending on the response mode. These preference reversals have been demonstrated when tasks were performed sequentially. That is, subjects completed one task before beginning another. In an attempt to eliminate preference reversals, we asked subjects to perform tasks simultaneously. That is, subjects made two types of responses for each pair of gambles before evaluating the next pair. In the condition with no financial incentives, preference reversal rates were slightly reduced. In another condition, subjects were paid for their participation and they were allowed to play a gamble with real monetary compensation. A gamble pair was randomly selected, and if a subject's responses in the two tasks were consistent for that pair, he or she was allowed to play the ‘preferred’ gamble. Otherwise, the experimenter selected the gamble from the pair. With these financial incentives, systematic preference reversals were eliminated for two of the three task combinations. Preference reversals continued to occur for attractiveness ratings versus selling prices, although, even for that pair of tasks, the reversal rate was significantly reduced. For all three task pairs, preference orders from the two tasks appeared to merge into more consistent orders.     

Information Processing Strategies in Riskless Preference Reversals: The Prominence Effect

A preference reversal occurs whenever an individual prefers one alternative to another in one response mode (e.g., choice) but shows the opposite preference order in another response mode (e.g., attractiveness ratings, matching). In previous studies of riskless multiattribute preferences the most common reversal pattern involves a prominence effect: The more important attribute has a greater influence in choices than in matching judgments. Previous research has suggested that the prominence effect can be accounted for by the strategy compatibility principle, which states that response tasks can evoke different decision strategies and these strategies determine the relative impact of the various attributes. This article attempts to establish the mediating role of decision processes in determining the occurrence and pattern of riskless preference reversals. In a process tracing experiment we replicate previous findings of a prominence effect in riskless two-attribute preferences. In addition, there are clear differences in process between response modes, and these differences are consistent with previous explanations of riskless preference reversals. Finally, we are able to predict subject level differences in choice preferences and choice versus matching reversals using measures of information search.     

Individual differences in the use of simplification strategies in a complex decision-making task

Decision time results were used to assess the strategies that 90 college undergraduates used in a complex decision-making task. Trend analyses revealed that the functions relating choice time to the number of choice alternatives in a set and the number of attributes comprising those alternatives contained linear (increasing) components. In addition, for a portion of the subjects, there was a quadratic effect of the number of attributes available to the decision maker on choice time, suggesting that these subjects adopted simplification strategies at high levels of task complexity. Reliable individual differences in these trend components were observed, consistent with individual differences in motivation and/or processing capacities. These individual differences were included in an information-processing model of decision behavior that captured the choice time data observed in this study. Subjects' ratings of apartments were used as a basis to assess the extent to which the use of simplification strategies resulted in preference reversals. Contrary to expectation, subjects whose choice times contained quadratic components demonstrated fewer preference reversals at high levels of information load.     

The allure of equality: uniformity in probabilistic and statistical judgment

Uniformity, that is, equiprobability of all available options is central as a theoretical presupposition and as a computational tool in probability theory. It is justified only when applied to an appropriate sample space. In five studies, we posed diversified problems that called for unequal probabilities or weights to be assigned to the given units. The predominant response was choice of equal probabilities and weights. Many participants failed the task of partitioning the possibilities into elements that justify uniformity. The uniformity fallacy proved compelling and robust across varied content areas, tasks, and cases in which the correct weights should either have been directly or inversely proportional to their respective values. Debiasing measures included presenting individualized and visual data and asking for extreme comparisons. The preference of uniformity obtains across several contexts. It seems to serve as an anchor also in mathematical and social judgments. People’s pervasive partiality for uniformity is explained as a quest for fairness and symmetry, and possibly in terms of expediency.     

Does probability weighting matter in probability elicitation?

One of the most widely used methods for probability encoding in decision analysis uses binary comparisons (choices) between two lotteries: one that depends on the values of the random variable of interest and another that is contingent on an external reference chance device (typically a probability wheel). This note investigates the degree to which differences in probability weighting functions between the two types of events could affect the practice of subjective probability encoding. We develop a general methodology to investigate this question and illustrate it with two popular probability weighting functions over the range of parameters reported in the literature. We use this methodology to (a) alert decision analysts and researchers to the possibility of reversals, (b) identify the circumstances under which overt preferences for one lottery over the other are not affected by the weighting function, (c) document the magnitude of the differences between choices based on probabilities and their corresponding weighting functions, and (d) offer practical recommendations for probability elicitation.     

Variation of Preference Inconsistency When Applying Ratio and Interval Scale Pairwise Comparisons

Several studies on numerical rating in discrete choice problems address the tendency of inconsistencies in decision makers' measured preferences. This is partly due to true inconsistencies in preferences or the decision makers' uncertainty on what he or she really wants. This uncertainty may be reflected in the elicited preferences in different ways depending on the questions asked and methods used in deriving the preferences for alternatives. Some part of the inconsistency is due to only having a discrete set of possible judgments. This study examined the variation of preference inconsistency when applying different pairwise preference elicitation techniques in a five‐item discrete choice problem. The study data comprised preferences of five career alternatives elicited applying interval scale and numerically and verbally anchored ratio scale pairwise comparisons. Statistical regression technique was used to analyse the differences of inconsistencies between the tested methods. The resulting relative residual variances showed that the interval ratio scale comparison technique provided the greatest variation of inconsistencies between respondents, thus being the most sensitive to inconsistency in preferences. The numeric ratio scale comparison gave the most uniform preferences between the respondents. The verbal ratio scale comparison performed between the latter two when relative residual variances were considered. However, the verbal ratio scale comparison had weaker ability to differentiate the alternatives. The results indicated that the decision recommendation may not be sensitive to the selection between these preference elicitation methods in this kind of five‐item discrete choice problem. The numeric ratio scale comparison technique seemed to be the most suitable method to reveal the decision makers' true preferences. However, to confirm this result, more studying will be needed, with an attention paid to users' comprehension and learning in the course of the experiment. Copyright © 2013 John Wiley & Sons, Ltd.     

Buying/Selling Price Preference Reversals: Preference for Environmental Changes in Buying versus Selling Modes

Many studies have shown that the most people are willing to pay to obtain an object often is significantly less than the least they will accept to relinquish the object (i.e., selling prices tend to be higher than buying prices). Most tests of the buying/selling price discrepancy have elicited values either for everyday market items (e.g., mugs, candy bars) or for environmental changes (e.g., a decrease in air quality, a landfill clean-up). The literature indicates a possible interaction between buying/selling prices and commodity type; buying/selling price differences seem greater for environmental improvements than for market items. In other words, people show more relative preference for environmental improvements in selling modes than they do in buying modes. A significant difference in preference due to elicitation mode is commonly termed a "preference reversal." The four experiments presented here establish this new preference reversal and examine the reasons for it. The results from these studies provide information about the nature of preference reversals, the valuation process as a whole, and the unique problem of valuing complex and risky items such as environmental changes.     

The effect of accountability on susceptibility to decision errors

Recent research indicates that accountability can influence both what and how people think and might reduce decision makers' susceptibility to a variety of common judgment and choice errors. It is proposed that accountability can reduce decision errors if (1) decision makers are able to anticipate which response will be evaluated as more rational, and without concerns about accountability decision makers tend to select a different response, or (2) the normatively correct response can be identified by the more thorough and complex information processing associated with accountability. Consistent with the first proposition, four experiments demonstrated that accountability can reduce the sunk cost effect. The findings suggest that this debiasing effect reflects the subjects' expectation that they would be evaluated more favorably if they ignored sunk costs. Contrary to the second proposition, the prediction that accountable decision makers, due to their more thorough and multidimensional processing, would exhibit more consistent preferences across preference elicitation procedures was not supported in two studies. Finally, as hypothesized, accountability did not reduce a variety of decision errors for which the correct response was not known and was unlikely to be identified with more thorough information processing. These results are consistent with the notion that accountability effects in decision making are driven by the desire to be favorably evaluated and avoid criticism by others.     

What lies beneath: Reframing framing effects

Decision framing concerns how individuals build internal representations of problems and how these determine the choices that they make. Research in this area has been dominated by studies of the framing effect, showing reversals in preference associated with the form in which a decision problem is presented. While there are studies that fail to reveal this effect, there is at present no theory that can explain why and when the effect occurs. The purpose of this article is to present a selective review of research and use this to argue for a new framework for considering decision framing, to interpret past studies, and to set an agenda for future research. A simple information-processing model is developed. The model provides the basis for arguing that previous research has taken too narrow a view of how decision problems are internally represented and how these representations are transformed into choice behaviour. In addition, the model is used to highlight the importance of decision content and context.     

The Characteristic Objects Method: A New Distance‐based Approach to Multicriteria Decision‐making Problems

Multicriteria decision‐making (MCDM) methods are concerned with the ranking of alternatives based on expert judgements made using a number of criteria. In the MCDM field, the distance‐based approach is one popular method for obtaining a final ranking. The technique for order preference by similarity to the ideal solution (TOPSIS) is a commonly used example of this kind of MCDM method. The TOPSIS ranks the alternatives with respect to their geometric distance from the positive and negative ideal solutions. Unfortunately, two reference points are often insufficient, especially for nonlinear problems. As a consequence of this situation, the final result ranking is prone to errors, including the rank reversals phenomenon. This study proposes a new distance‐based MCDM method: the characteristic objects method. In this approach, the preferences of each alternative are obtained on the basis of the distance from the nearest characteristic objects and their values. For this purpose, we have determined the domain and Fuzzy number set for all the considered criteria. The characteristic objects are obtained as the combination of the crisp values of all the Fuzzy numbers. The preference values of all the characteristic object are determined on the basis of the tournament method and the principle of indifference. Finally, the Fuzzy model is constructed and is used to calculate preference values of the alternatives, making it a multicriteria model that is free of rank reversal. The numerical example is used to illustrate the efficiency of the proposed method with respect to results from the TOPSIS method. The characteristic objects method results are more realistic than the TOPSIS results. Copyright © 2014 John Wiley & Sons, Ltd.