Preference Reversal Phenomenon:Functional Dimension Of The Commodity And Genetic Perspective

Preference reversal refers to a change in the relative frequency by which one option is favored over another,which was discovered by Lichtenstein and Slovic in a simulated game in 1971.The preference reversal violates several axioms about preference in economics,such as transitivity,substitution,and so on,and the research on it is of the great theoretical value.Therefore,this phenomenon has aroused the interest of many economists and psychologists since it was discovered.Up to now,researchers have designed different experimental paradigms and used different experimental materials to study preference reversal from different perspectives.In addition,as a common phenomenon,it has been found in personnel recruitment,consumer behavior,medical decision-making,and many other situations.Therefore,studying the mechanism of preference reversal will help us solve many practical problems.In consumer behavior,researchers often divide products into hedonic and utilitarian goods.Hedonic products are products or services that make people feel pleasant and fun,while the utilitarian goods are more used to achieve their own purposes or to complete a practical task.Michael is the first scholar who studied the preference reversal between choices and willing-to-pay(WTP)in consumer goods,and after that,researchers have done a great deal of research on preference reversal in other fields.However,the participants of these studies were almost western subjects.For the differences in decision-making between the eastern and western populations have been observed in many studies,we recruited Chinese subjects to repeat Michael’s experiment to explore whether the same result will be observed.In addition,from the study of the endowment effect,we know that as two different bidding methods,the result of willingness-to-pay(WTP)and willingness-to-accept(WTA)may differ from each other.Michael only examined the reversal of preference between selection and WTP in his study,and it was still an unanswered question that whether there is a reversal of preference between the choice and WTA.We added the section of WTA to Michael’s experiment to further investigate whether there is a preference reversal between the choice and WTA.In study 1,we adopted the “Same information-different reactions” paradigm of preference reversal.The materials we used were ten pairs of hedonic goods and utilitarian goods,and every pair of the hedonic good and utilitarian good were nearly the same in market price.The results showed that:(1)As revealed in the past experiments,most of the 60 subjects showed significant preference reversal,namely choosing the hedonic good in the situation of making choices while offering a higher price for the utilitarian good in the bid(WTP/WTA)situation;(2)The interaction between the gender and two kinds of preference reversals was significant.To be specific,there was not a significant difference between the two preference reversal indexes of females;as to males,the preference reversal index between the choice and WTP was significantly higher than that between the choice and WTA.The researchers of decision-making have studied the effects of genes on the endowment effect,anchoring effect,loss aversion,and framing effect.However,it was still an unsolved problem that whether genes can influence preference reversal.To answer this question,in study 2,we selected rs806379,a unit of the cannabinoid receptor gene(CNR1),to study the effect of CNR1 on preference reversal.According to previous studies,CNR1 is the gene that encodes the Cannabinoid receptor,a kind of receptor expressed in the brain area which is associated with emotional states and mental processes.Therefore,the Endocannabinoid system is deemed to play an important role in regulating mood.Besides,studies have found that rs806379 gene locus is related to impulsivity,which means that compared to the individual with A/T genotype individuals,the individual with A/A genotype is more impulsive.According to the anchoring-and-adjusting theory,people adjust away from the anchor to estimate the price,but they cannot make sufficient adjustments,leading to the final price being too close to the anchor.According to the research result,impulsive people stop adjusting more quickly,so we speculate that they would set a higher price for $-bet.Based on the characteristics of rs806379 and the paradigm of preference reversal,we suppose that individuals with A/A genotype are more likely to show preference reversal.To explore whether goods values and genes can influence the preference reversal,we conducted a behavior experiment and a gene experiment on Chinese college students in study 2.In study 2,participants attended a classic preference reversal experiment before offering saliva for genetic testing.The question we were concerned about is whether Single-nucleotide polymorphism rs806379 of the CNR1 gene can influence the intensity of the preference reversal.The results showed that:(1)Being consistent with the result of the previous research,there was a significant preference reversal phenomenon.To be specific,the subjects chose P-bet in the situation of making choice but offered a higher price to $-bet in the bid situation;(2)The different genotypes of rs806379 had a significant effect on the preference reversal.In the small probability group of $-bet,subjects of A/A genotype showed stronger preference reversal than subjects with A/T or T/T genotype.This is in line with our expectations.To sum up,this study found that preference reversal exists between the choice and WTA on the functional dimension of the commodity.Importantly,this study firstly provided direct evidence that genes can influence preference reversal.Our results suggested that even the Single-nucleotide polymorphism of the gene can influence the complex economic activities of humans.