Attentional shifts and preference reversals: an eye-tracking study

Abstract

The classic preference reversal phenomenon, where monetary evaluations contradict risky choices, has been argued to arise due to a focus on outcomes during theevaluation of alternatives, leading to overpricing of long-shot options. Such an explanation makes the implicit assumption that attentional shifts drive the phenomenon.We conducted an eye-tracking study to causally test this hypothesis by comparing atreatment based on cardinal, monetary evaluations with a different treatment avoidinga monetary frame. We find a significant treatment effect in the form of a shift inattention toward outcomes (relative to probabilities) when evaluations are monetary. Our evidence suggests that attentional shifts resulting from the monetary frame ofevaluations are a driver of preference reversals.