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Testing the Rate of Preference Reversal in Personal and Social Decision-Making

Wednesday 27 November 2013, 1.00PM to 2.00pm

Speaker(s): Adam Oliver, LSE

Abstract: Classic preference reversal, where choice and valuation procedures generate inconsistent preference orderings, has rarely been tested in hypothetical health care treatment scenarios. Two studies - the first non-incentivised and the second incentivised - are reported in this article. In both studies, respondents are asked to make decisions that affect themselves (a personal decision making frame) and those for whom they are responsible (a social decision making frame). The results show non-negligible and systematic rates of preference reversal in both frames, although these rates are slightly, but non-significantly, lower in the incentivised condition. Moreover, in both studies, the rate of predicted preference reversal was somewhat higher in the social than in the personal decision making frame, a finding that is explained by greater risk aversion when choosing treatment options for others than when choosing treatments for oneself. This paper is forthcoming in the Journal of Health Economics.

Bio: Adam Oliver is a Reader in Social Policy at the London School of Economics and Political Science. He co-founded the Health Equity Network, the European Health Policy Group and the journal, Health Economics, Policy and Law. He has published widely in the areas of health economics, health policy, behavioural economics, and behavioural public policy.

Location: ARRC Auditorium (A/RC/014)