REVERSALS OF PREFERENCE IN ALLOCATION DECISIONS - JUDGING AN ALTERNATIVE VERSUS CHOOSING AMONG ALTERNATIVES

This paper identifies a systematic instability in the weight that people place on interpersonal comparisons of outcomes. When evaluating the desirability of a single outcome consisting of a payoff for oneself and another person, people display great concern for relative payoffs. However, when they choose between two or more outcomes, their choices reflect greater concern with their own payoffs and less concern for relative payoffs. Modal subjects in our experiments rated the outcome of $500 for self/$500 for other as more desirable than the outcome $600 for self/$800 for other when both were evaluated independently, but they chose the latter outcome over the former when presented with the two options simultaneously. We offer a theoretical explanation for this phenomenon and demonstrate its robustness.