When do preference reversals occur? - Chapter 33

Consider the following task. “A woman lost the use of her left leg as a result of a stabbing. She was stabbed during a robbery in a grocery store in her neighborhood. There are two grocery stores near the woman’s home, one of which she is a regular customer. Two scenario’s:

A. The robbery happened in the woman’s regular grocery store.

B. The woman’s regular grocery store was closed, so she went to the other grocery store, where she was stabbed. Should the grocery store in which the victim was stabbed make a difference to her compensation?

Your judgment was made in a joint evaluation. Both scenarios were considered and compared at the same time. We would all agree that the compensation should be the same in both scenarios. The location is not a relevant factor to victim compensation. This evaluation involved System 2 (thinking slow).

In an experiment, participants saw only one scenario and were asked to assign it a dollar value (single evaluation). The victim was awarded a much greater compensation if she was stabbed in the store she usually does not visit. Poignancy, related to regret, is a counterfactual feeling: “if only she had shopped at her regular grocery store”. The mechanism of intensity matching and substitution (System 1) translate the strength of the emotional response to the case into a monetary value. This explains the big difference in sums.

Comparing these experiments demonstrates a distinct contrast. People who see the scenarios together (within-subject) endorse the principle that poignancy is not a legitimate consideration. The principle is relevant only when both scenarios are shown together, and this usually is not the case in daily life. Life is usually experienced in the between-subjects mode. The lack of contrasting alternatives that could change your mind and WYSIATI result into the fact that your (moral) beliefs do not necessarily govern your emotional responses. The discrepancy between joint and single evaluation of the stabbing scenario is part of a broad category of reversals of choice and judgment (preference reversals).

Preference reversals occur because joint evaluation focuses attention on a specific aspect of the case, which was less salient in single evaluation. Single evaluation is mostly determined by the emotional responses of System 1. Joint evaluation involves a effortful and more careful assessment (System 2).