Unifying Procedure-Dependent Preference Reversals : Theory and Experiments

Elicitation procedures (e.g., choice, valuation, matching, joint/separate evaluation) may generate reversed preferences between alternatives. Yet procedure-dependent preferences can be endogenous. When attribute importance is imperfectly known, people can engage in costly information retrieval/acquisition activities (i.e., deliberation) prior to making decisions. Elicitation procedures can influence revealed preferences through affecting the incentive for deliberation. Therefore, contextual deliberation can endogenously yield procedure-dependent preference reversals, offer a micro-foundation for extant psychological hypotheses, and coherently organize apparently unrelated/inconsistent findings in the literature. We also report experimental findings that are inconsistent with extant hypotheses but can be reconciled by contextual deliberation