Nil Evidence of Timing and Order Effects in Classical Preference Reversal Experiments

In preference reversals, subjects express different orderings over alternatives depending on how preferences are elicited. In classical reversal tasks, the so-called “standard reversal” sees subjects select a safe bet over a risky one with a similar expected value in a straight choice but give a higher monetary evaluation to the risky one. One interpretation of the reversals is that they are asymmetric “mistakes”, either due to imprecise preferences, insufficient adjustment from an anchor, contingent weighting, or unstable reference points. In this last account, reversals occur because deciders fail to think about how some bet B compares with the alternative when they evaluate B in isolation, which influences the way in which B is perceived. If we further assume that memory decay affects the likelihood that the alternative bet comes to mind, the account predicts order and timing effects on the reversal rate. We run several experiments where we vary the chances that the subjects’ considered reference points change between decisions, or more specifically, that they have in mind the alternative bet in a pair while evaluating bet B. Yet the reversal rate shows no variation across treatments in the directions predicted and we find no systematic order or timing effects. We conclude that reversals are not necessarily reduced (increased) if subjects are more (less) likely to recall during the evaluations how bet B and its alternative compare