Marketing Papers

Document Type

Technical Report

Date of this Version

5-1992

Publication Source

Journal of Experimental Psychology: Human Perception and Performance

Volume

18

Issue

2

Start Page

331

Last Page

346

DOI

10.1037/0096-1523.18.2.331

Abstract

Subjects judged the values of lotteries from 3 points of view: the highest price that a buyer should pay, the lowest price that a seller should accept, and the “fair” price. The rank order of judgments changed as a function of point of view. Data also showed violations of branch independence and monotonicity (dominance). These findings pose difficulties for nonconfigural theories of decision making, such as subjective expected utility theory, but can be described by configural-weight theory. Configural weighting is similar to rank-dependent utility theory, except that the weight of the lowest outcome in a gamble depends on the viewpoint, and 0-valued outcomes receive differential weighting. Configural-weight theory predicted the effect of viewpoint, the violations of branch independence, and the violations of monotonicity, using a single scale of utility that is independent of the lottery and the point of view.

Copyright/Permission Statement

© American Psychological Association, 1992. This paper is not the copy of record and may not exactly replicate the authoritative document published in the APA journal. Please do not copy or cite without author's permission. The final article is available, upon publication, at: http://dx.doi.org/10.1037/0096-1523.18.2.331

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Date Posted: 15 June 2018

This document has been peer reviewed.