Week 9: Multi-attribute Choice
Shafir, Eldar and Robyn A. LeBoeuf (2004). "Context and Conflict in Multiattribute Choice." In Blackwell Handbook of Judgment and Decision Making. D. J. Koehler and N. Harvey (Eds.). Oxford, Blackwell: 341-359. [This review paper outlines some basic findings that suggest some departures from the normative standards in the domain of multiattribute decision making.]
Tversky, Amos, Paul Slovic, and Daniel Kahneman. (1990). "The causes of preference reversals." American Economic Review 80: 204-217. [The paper reviews the basic preference reversal and explains these reversals in terms of "scale compatibility."]
Bettman, James R., Mary Frances Luce, and John W. Payne. (1998). "Constructive Consumer Choice Processes." Journal of Consumer Research 25(3): 187-217. [This paper suggests that choice (particularly consumer choice) is a constructive process.]
Hsee, Christopher K., George F. Loewenstein, Sally Blount and Max H. Bazerman (1999). "Preference Reversals between Joint and Separate Evaluation of Options: A Review and Theoretical Analysis." Psychological Bulletin 125(5): 576-590. [This review paper outlines a kind of preference reversal that differs from the Lichtenstein and Slovic type described in Tversky et al. (1990). This reversal involves different modes of evaluation, joint and separate.]
Questions
1. The Shafir and LeBoeuf briefly outlines how a decision should be evaluated according to the normative standard, Multiattribute Utility Theory (MAUT) (pp. 341-342). What are the basic principles of MAUT? These are not explicitly outlined in the paper, so it is useful to deduce these from the empirical evidence and try to articulate them as best as you can? What is the evidence that suggests that people violates these principles?
2. Consider the basic preference reversal outlined at the beginning of the Tversky et al paper. How is this pattern inconsistent with expected utility theory? What is scale compatibility, and how does this account explain preference reversals?
3. Bettman et al suggest that choice is constructive? What exactly does it mean for choice to be constructive? What assumptions does this account make about information processing? What evidence do Bettman et al muster for supporting this account of choice?
4. Hsee et al suggest that choices are often different when options are evaluated separately than evaluated jointly. What normative principle does this type of preference reversal violate? How is this preference reversal different from that described in Tversky et al (the Lichtenstein and Slovic preference reversal)? What is the evaluability hypothesis and how does this hypothesis account for the relevant preference reversals?