Preference Reversals in Monetary and Life Expectancy Evaluations

Abstract

Two experiments demonstrate a new type of preference reversal. In life expectancy evaluations, health items (e.g., a new treatment that would give you perfect 20/20 vision) were preferred to commodities (e.g., 1 day of vacation in Bermuda), but in monetary evaluations, commodities were preferred to health items. These reversals result from the pattern of similarity of commodities and health items to money and life expectancy and are therefore an example of Tversky, Sattath, and Slovic′s (1988) semantic compatibility principle.