Document Type

Working Paper

Publication Date


Working Paper Number

WP #15015, September 2015


The preference reversal phenomenon is an iconic empirical puzzle in decision theory: inconsistent preference rankings for and pricing of a low-payoff, high-probability lottery and a high-payoff, low-probability lottery. The preference reversal phenomenon has long challenged standard economic theory. We test whether pre-play learning removes preference reversals. Pre-play learning denotes ex-ante lottery learning, where subjects observe playing lotteries before making decisions. In our experiment, we find that, with pre-play learning, subjects indicate minimum willingness to sell prices for lotteries consistent with their choices, suggesting that pre-play learning removes preference reversals.

JEL Classification

C91, D12, D81

File Format



50 pages

Included in

Economics Commons