Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/37400
Authors: 
Müller, Holger
Kroll, Eike Benjamin
Vogt, Bodo
Year of Publication: 
2010
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Consumer Behaviour and Intertemporal Choice G17-V1
Abstract: 
In this paper, the preference reversal phenomenon known from risk research is investigated according to which subjects prefer gamble A over B in competitive decisions although they reveal higher valuations in terms of a cash equivalent (CE) or a willingness to pay (WTP) for the latter when gambles are assessed separately in monadic judgments. In contrast to the experimental settings of research on risky choices, our studies observed unforced and binding purchase decisions of experienced consumers between real products in natural shopping environments. Results confirm robustness of preference reversals in risk-free purchase decisions indicating that orderings of product preferences reverse significantly between evaluations in monadic and competitive designs. While recent pricing research has been largely focused on monadic designs and suggested BDM mechanisms or second-price auctions for elicitations of consumers' true willingness to pay, results of our studies indicate a substantial discrepancy between preference orders based on monadic judgments and preferences that consumers reveal in competitive purchase decisions.
Subjects: 
Preference Reversals
Willingness to Pay
Monadic Designs
Competitive Designs
Pricing Research
Procedure Invariance
JEL: 
C90
C91
M31
Document Type: 
Conference Paper

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