Many theories of individual choice under risk and uncertainty are formulated in terms of preferences over prospects, that is, probability distributions of consequences. By contrast, regret theory is formulated in terms of actions, that is, n-tuples of state-contingent consequences. From the viewpoint of prospect-based theories, what appear to be innocuous rephrasings of choice problems are predicted by regret theory to cause people to reverse their choices. This paper follows up earlier results with a new kind of experimental test.

Many theories of individual choice under risk and uncertainty are formu lated in terms of preferences over prospects, i.e., probability distr ibutions of consequences. By contrast, regret theory is formulated in terms of actions, i.e., n-tuples of state-contingent consequences. W hat appear from the viewpoint of prospect-based theories to be innocu ous rephrasings of choice problems are predicted by regret theory to cause people to reverse their choices. This paper follows up earlier results with a new kind of experimental test. The new evidence favors regret theory. Copyright 1988 by American Economic Association.

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The central proposition of disappointment theory is that an individual forms expectations about uncertain prospects, and that if the actual consequence turns out to be worse than (or better than) that expectation, the individual experiences a sensation of disappointment (or elation) generating a decrement (or increment) of utility which modifies the basic utility derived from the consequence. By incorporating a simple disappointment-elation function into a model of individual choice, many observed violations of conventional expected utility axioms—including violations of Savage's sure-thing principle and the “isolation effect”—can be predicted and defended as rational and dynamically consistent behaviour.

Many individuals' choices and valuations involve a degree of uncertainty/imprecision. This paper reports an experiment designed to obtain some measure of imprecision and to examine the extent to which it can explain preference reversals of two opposite forms, one of which appears not to have been reported previously. The model of imprecision we examine not only predicts both patterns but also provides an account of earlier results that are otherwise not well explained. The results suggest that any successful descriptive theory of choice and valuation will need to allow in some way for the imprecision surrounding people's decisions. (JEL C91, D11, D81)

The preference reversal phenomenon is usually interpreted as evidence of nontransitivity of preference, but has also been explained as the result of the difference between individuals' responses to choice and valuation problems; the devices used by experimenters to elicit valuations; and the "random lottery selection" incentive system. This paper reports an experiment designed so that none of these factors could generate systematic nontransitivities; yet systematic violations of transitivity were still found. The pattern of violation was analogous with that found in previous preference reversal experiments and is consistent with regret theory. Copyright 1991 by The Econometric Society.

Plott and Zeiler (2005) report that the willingness-to-pay/willingness-to-accept disparity is absent for mugs in a particular experimental setting, designed to neutralize misconceptions about the procedures used to elicit valuations. This result has received sustained attention in the literature. However, other data from that same study, not published in that paper, exhibit a significant and persistent disparity when the same experimental procedures are applied to lotteries. We report new data confirming both results, thereby suggesting that the presence or absence of a disparity may be a more complex issue than some may have supposed. (JEL C91, D12, D81, D83)