The Effects Of Risk Attitude And Probability Level On Preference Reversal Caused By Different Decision-making Roles

The traditional economic theory believes that people are rational decision-makers, and they hold the same preference to certain things. However, as the emergence of the preference reversal phenomenon, the traditional decision-making theories have been challenged. Preference reversal phenomenon is an unusual phenomenon which exists in everyday decision-making process, specifically referring to the different or revise preferences which are caused by different non-economic factors, so inconsistent decisions are made. In previous studies, scholars paid more attention to factors such as different ways of reaction and task characteristics, rarely comes to the variable of decision-makers. On the basis of the previous study, this article considers that different decision-makers could result in preference reversal in the field of consumer decision-making, meanwhile, the subjects’risk attitude and probability level (the possibility of gain) could also affect preference reversal. Therefore, this study introduces variables like attitude to risk and probability level to explore the specific impact of preference reversal lead by different decision-making rolesThis study is designed3×3×2, applies the situation questionnaire method, the experimental conditions are set closely to the consumer field, selecting the risk attitude (divided into risk averse, risk neutral, risk seeking), decision-making roles (decision-making for oneself, decision-making for others), probability level (25%,50%and75%) as a variables, and finds that:(1)Different decision-makers could cause preference reversal, and inconsistent decisions appears when decide for their own or for others.(2) Risk attitude could affect the preference reversal, risk-seeking subjects have the highest reversal rate:they tend to be more conservative when decide for others then for their own. Risk aversion has the lowest preference reversal rate, tends to be more adventurous when decide for others then for their own.(3) The probability level will affect the preference reversal and the lower the probability level, the highest reversal rate, the higher probability level, the lowest reversal rate.