Risky Decision Making: Testing for Violations of Transitivity Predicted by an Editing Mechanism

Transitivity is the assumption that if a person prefers A to B and B to C, then that person should prefer A to C. This article explores a paradigm in which Birnbaum, Patton and Lott (1999) thought people might be systematically intransitive. Many undergraduates choose C=(96,.85;96,.85;90,. 05; 12,.10)overA=(12,.10)overA=(96,. 9; 14,.05;14,.05;12,. 05), violating dominance. Perhaps people would detect dominance in simpler choices, such as A versus B=(96,.9;96,.9;12,. 10) and B versus C, and yet continue to violate it in the choice between A and C, which would violate transitivity. In this study we apply a true and error model to test intransitive preferences predicted by a partially effective editing mechanism. The results replicated previous findings quite well; however, the true and error model indicated that very few, if any, participants exhibited true intransitive preferences. In addition, violations of stochastic dominance showed a strong and systematic decrease in prevalence over time and violated response independence, thus violating key assumptions of standard random preference models for analysis of transitivity.