Empirical evidence for intransitivity in consumer preferences

Area of Science:

• Behavioral Economics
• Consumer Psychology

Background:

• Consumer preference patterns often assume transitivity, a principle of rational choice.
• Transitivity posits that if A is preferred to B, and B is preferred to C, then A must be preferred to C.

Purpose of the Study:

• To empirically test the validity of the transitivity assumption in consumer preferences.
• To investigate factors influencing transitivity, including goods type and economic conditions.

Main Methods:

• Survey methodology employed with 70 subjects.
• Preferences probed for edible and nonedible goods under varying conditions: no restrictions, budget restrictions with price changes, and decreased disposable income.

Main Results:

• Evidence of transitivity in consumer preferences was largely absent.
• Transitivity was observed in only 8% of the sample, though it was strong when present.
• Transitivity was more prevalent for edible goods compared to nonedible goods.

Conclusions:

• The transitivity assumption is not consistently upheld in real-world consumer choices.
• Consumer rationality, as defined by transitivity, is weak, particularly for nonedible items.
• Future research should explore the psychological and economic drivers behind these preference inconsistencies.