Framing reference points: The effect of integration and segregation on dynamic inconsistency

Rachel Barkan, Shai Danziger, Guy Ben-Bashat, Jerome R. Busemeyer

Research output: Contribution to journalReview articlepeer-review

10 Scopus citations

Abstract

Dynamic inconsistency reflects a prediction bias where decision makers fail to follow their plans simply because they experience outcomes on which their plan was based. Specifically, after experiencing an anticipated gain in one gamble, decision makers reject a second gamble they had planned to accept. The opposite pattern is found with losses. A common account of these findings is that prior outcomes are segregated during planned choices and are integrated only after being experienced. According to a derived "computational" hypothesis, integration of prior outcomes at the planning stage should reduce dynamic inconsistency while segregation should increase it. A "descriptive" meaning of segregation and integration offers the opposite hypothesis. An experiment that framed planned choices to encourage either integration or segregation of prior outcomes indicated that dynamic inconsistency persists in both framing conditions. We suggest alternative explanations for dynamic inconsistency, and discuss the difficulty of bridging between predicted and actual preferences.

Original languageEnglish
Pages (from-to)213-226
Number of pages14
JournalJournal of Behavioral Decision Making
Volume18
Issue number3
DOIs
StatePublished - 1 Jan 2005

Keywords

  • Dynamic consistency
  • Framing
  • Integration
  • Isolation
  • Preference reversal

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