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Preference

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375:. It has been argued that desire is the more fundamental notion and that preferences are to be defined in terms of desires. For this to work, desire has to be understood as involving a degree or intensity. Given this assumption, a preference can be defined as a comparison of two desires. That Nadia prefers tea over coffee, for example, just means that her desire for tea is stronger than her desire for coffee. One argument for this approach is due to considerations of parsimony: a great number of preferences can be derived from a very small number of desires. One objection to this theory is that our introspective access is much more immediate in cases of preferences than in cases of desires. So it is usually much easier for us to know which of two options we prefer than to know the degree with which we desire a particular object. This consideration has been used to suggest that maybe preference, and not desire, is the more fundamental notion. 387:, the term can be used to describe when a company pays a specific creditor or group of creditors. From doing this, that creditor(s) is made better off, than other creditors. After paying the 'preferred creditor', the company seeks to go into formal insolvency like an administration or liquidation. There must be a desire to make the creditor better off, for them to be a preference. If the preference is proven, legal action can occur. It is a wrongful act of trading. Disqualification is a risk. Preference arises within the context of the principle maintaining that one of the main objectives in the winding up of an insolvent company is to ensure the equal treatment of creditors. The rules on preferences allow paying up their creditors as insolvency looms, but that it must prove that the transaction is a result of ordinary commercial considerations. Also, under the English 158:. The first axiom of transitivity refers to consistency between preferences, such that if x is preferred to y and y is preferred to z, then x has to be preferred to z. The second axiom of completeness describes that a relationship must exist between two options, such that x must be preferred to y or y must be preferred to x, or is indifferent between them. For example, if I prefer sugar to honey and honey to sweetener then I must prefer sugar to sweetener to satisfy transitivity and I must have a preference between the items to satisfy completeness. Under the axiom of completeness, an individual cannot lack a preference between any two options. 189:, then he is maximizing the expected value of a utility function. In utility theory, preference relates to decision makers' attitudes towards rewards and hazards. The specific varieties are classified into three categories: 1) risk-averse, that is, equal gains and losses, with investors participating when the loss probability is less than 50%; 2) the risk-taking kind, which is the polar opposite of type 1); 3) Relatively risk-neutral, in the sense that the introduction of risk has no clear association with the decision maker's choice. 162: 391:, if a creditor was proven to have forced the company to pay, the resulting payment would not be considered a preference since it would not constitute unfairness. It is the decision to give a preference, rather than the giving of the preference pursuant to that decision, which must be influenced by the desire to produce the effect of the preference. For these purposes, therefore, the relevant time is the date of the decision, not the date of giving the preference. 1750: 97:, even unconsciously. Consequently, preference can be affected by a person's surroundings and upbringing in terms of geographical location, cultural background, religious beliefs, and education. These factors are found to affect preference as repeated exposure to a certain idea or concept correlates with a positive preference. 149:
Consumer preference, or consumers' preference for particular brands over identical products and services, is an important notion in the psychological influence of consumption. Consumer preferences have three properties: completeness, transitivity and non-satiation. For a preference to be rational, it
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Individual preferences can be represented as an indifference curve given the underlying assumptions. Indifference curves graphically depict all product combinations that yield the same amount of usefulness. Indifference curves allow us to graphically define and rank all possible combinations of two
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are two closely related notions: they are both conative states that determine our behavior. The difference between the two is that desires are directed at one object while preferences concern a comparison between two alternatives, of which one is preferred to the other. The focus on preferences
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process. The term is also used to mean evaluative judgment in the sense of liking or disliking an object, as in Scherer (2005), which is the most typical definition employed in psychology. It does not mean that a preference is necessarily stable over time. Preference can be notably modified by
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In psychology, risk preference is occasionally characterised as the proclivity to engage in a behaviour or activity that is advantageous but may involve some potential loss, such as substance abuse or criminal action that may bring significant bodily and mental harm to the individual.
173:. This is because the axioms allow for preferences to be ordered into one equivalent ordering with no preference cycles. Maximising utility does not imply maximise happiness, rather it is an optimisation of the available options based on an individual's preferences. The so-called 281:
describes an alternative approach to predicting human behaviour by using psychological theory which explores deviations from rational preferences and the standard economic model. It also recognises that rational preferences and choices are limited by
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In economics, risk preference refers to a proclivity to engage in behaviours or activities that entail greater variance returns, regardless of whether they be gains or losses, and are frequently associated with monetary rewards involving lotteries.
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There are two different traditions of measuring preference for risk, the revealed and stated preference traditions, which coexist in psychology, and to some extent in economics as well.
69:. The difference between the two is that desires are directed at one object while preferences concern a comparison between two alternatives, of which one is preferred to the other. 511:
Coppin, G., Delplanque, S., Cayeux, I., Porcherot, C., & Sander, D. (2010). "I'm no longer torn after choice: How explicit choices can implicitly shape preferences for odors".
264: 238: 218: 1338:"The Decision Making Individual Differences Inventory and guidelines for the study of individual differences in judgment and decision-making research" 353:
Risk preference evaluated from stated preferences emerges as a concept with significant temporal stability, but revealed preference measures do not.
146:, where individuals make decisions based on rational preferences which are aligned with their self-interests in order to achieve an optimal outcome. 1636: 981:
Kalter, Frank; Kroneberg, Clemens (2012). "Rational Choice Theory and Empirical Research: Methodological and Theoretical Contributions in Europe".
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The mathematical foundations of most common types of preferences — that are representable by quadratic or additive functions — laid down by
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Allan, Bentley B. (2019). "Paradigm and nexus: neoclassical economics and the growth imperative in the World Bank, 1948-2000".
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Tangian, Andranik (2002). "Constructing a quasi-concave quadratic objective function from interviewing a decision maker".
1791: 1295: 1159:"Loss aversion, overconfidence of investors and their impact on market performance evidence from the US stock markets" 737: 333: 174: 31: 273:) does not always accurately predict human behaviour because it makes unrealistic assumptions. In response to this, 485:
Sharot, T.; De Martino, B.; & Dolan, R. J. (2009). "How choice reveals and shapes expected hedonic outcome".
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are rules of thumb such as elimination by aspects which are used to make decisions rather than maximising the
88:, preferences refer to an individual's attitude towards a set of objects, typically reflected in an explicit 274: 1744: 169:
If preferences are both transitive and complete, the relationship between preference can be described by a
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Schotter, Andrew (2006). "Strong and Wrong: The Use of Rational Choice Theory in Experimental Economics".
270: 161: 143: 139: 106: 57:. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to 416: 278: 200:
to develop methods for their elicitation. In particular, additive and quadratic preference functions in
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England, Paula (1989). "A feminist critique of rational-choice theories: Implications for sociology".
76:, the term is used to determine which outstanding obligation the insolvent party has to settle first. 1241:"The influence of neuroscience on US Supreme Court decisions about adolescents' criminal culpability" 388: 151: 904:
Debreu, Gérard (1960). "Topological methods in cardinal utility theory". In Arrow, Kenneth (ed.).
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to provide observable evidence in relation to people's actions. These actions can be described by
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Risk tolerance is a critical component of personal financial planning, that is, risk preference.
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also violate the assumption of rational preferences by causing individuals to act irrationally.
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refers to the set of assumptions related to ordering some alternatives, based on the degree of
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use preference relation for decision-making. As connative states, they are closely related to
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Tangian, Andranik (2004). "A model for ordinally constructing additive objective functions".
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in 1944, explains that so long as an agent's preferences over risky options follow a set of
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Appelt, Kirstin C.; Milch, Kerry F.; Handgraaf, Michel J. J.; Weber, Elke U. (April 2011).
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variables can be constructed from interviews, where questions are aimed at tracing totally
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The Cognitive Basis of Institutions: A Synthesis of Behavioral and Institutional Economics
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argue that it provides a normative model for people to adjust and optimise their actions.
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Risk preference is defined as how much risk a person is prepared to accept based on the
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Scherer, Klaus R. (December 2005). "What are emotions? And how can they be measured?".
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Mata, Rui; Frey, Renato; Richter, David; Schupp, Jürgen; Hertwig, Ralph (2018-05-01).
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Bossert, Walter; Kotaro, Suzumura (2009). "External Norms and Rationality of Choice".
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Brehm, J. W. (1956). "Post-decision changes in desirability of choice alternatives".
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Herfeld, Catherine (2021). "Revisiting the criticisms of rational choice theories".
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Grandori, Anna (2010). "A rational heuristic model of economic decision making".
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Beshears, John; Choi, James; Laibson, David; Madrian, Brigitte (May 2008).
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Greater transitivity indicates that the indifference curves do not overlap.
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Empirical evidence has shown that the usage of rational preferences (and
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Kirsh, Yoram (2017). "Utility and Happiness in a Prosperous Society".
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A propensity for diversity causes indifference curves to curve inward.
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Aguirre Sotelo, Jose Antonio Manuel; Block, Walter E. (2014-12-31).
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Debreu, Gérard (1952). "Definite and semidefinite quadratic forms".
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coordinate planes without referring to cardinal utility estimates.
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This article is about the psychological term. For other uses, see
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is a technical term usually used in relation to choosing between
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Stanford Encyclopedia of Philosophy article on 'Preferences'
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Case, Karl (2008). "A Response to Guerrien and Benicourt".
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because of this relation to behavior. Some methods such as
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they provide. The concept of preferences is used in post-
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Journal of Economics, Finance and Administrative Science
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OUI – Institute for Policy Analysis Working Paper Series
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If more is better, the indifference curve dips downward.
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Charness, Gary; Gneezy, Uri; Imas, Alex (March 2013).
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Economic 1766:Categories 1642:October 1, 1323:2023-04-23 433:References 401:Motivation 385:Insolvency 379:Insolvency 292:Heuristics 284:heuristics 121:preference 115:and other 86:psychology 80:Psychology 74:insolvency 51:preference 47:philosophy 39:psychology 1782:Free will 1558:155414997 1504:0895-3309 1449:: 43–51. 1364:1930-2975 1265:1471-003X 1226:2083-1277 1195:158379317 1144:146886098 1084:154665809 1030:143743641 856:244976714 848:0021-5368 702:: 61–86. 586:158564367 551:0093-5301 251:− 125:happiness 113:economics 101:Economics 43:economics 1689:(2015). 1610:"Desire" 1576:"Desire" 1512:30203934 1424:24761048 1281:12544303 1273:23756633 745:Synthese 677:29003374 639:15220288 395:See also 196:enabled 18:Penchant 1777:Utility 1415:3993927 1372:2468108 891:1907852 765:6430197 367:desires 133:utility 95:choices 67:desires 1697:  1668:  1556:  1510:  1502:  1422:  1412:  1370:  1362:  1314:  1279:  1271:  1263:  1224:  1193:  1142:  1105:  1082:  1028:  889:  854:  846:  805:  763:  675:  637:  584:  549:  422:Choice 300:biases 288:biases 187:axioms 1747: 1620:3 May 1586:4 May 1554:S2CID 1390:(PDF) 1368:S2CID 1277:S2CID 1191:S2CID 1140:S2CID 1080:S2CID 1026:S2CID 887:JSTOR 852:S2CID 761:S2CID 741:(PDF) 673:S2CID 635:S2CID 582:S2CID 1723:2022 1695:ISBN 1666:ISBN 1644:2018 1622:2021 1588:2021 1508:PMID 1500:ISSN 1420:PMID 1360:ISSN 1312:ISBN 1269:PMID 1261:ISSN 1222:ISSN 1103:ISBN 1051:(1). 844:ISSN 803:ISBN 547:ISSN 364:and 286:and 181:and 154:and 45:and 1755:DOC 1546:doi 1490:hdl 1482:doi 1451:doi 1410:PMC 1402:doi 1350:doi 1304:doi 1253:doi 1181:hdl 1171:doi 1132:doi 1072:doi 1018:doi 991:doi 964:doi 960:159 937:doi 933:141 910:doi 879:doi 836:doi 753:doi 749:187 704:doi 665:doi 627:doi 574:doi 539:doi 469:doi 383:In 111:In 84:In 72:In 37:In 1768:: 1652:^ 1612:. 1596:^ 1578:. 1566:^ 1552:. 1542:31 1540:. 1536:. 1520:^ 1506:. 1498:. 1488:. 1478:32 1476:. 1472:. 1447:87 1445:. 1441:. 1418:. 1408:. 1398:92 1396:. 1392:. 1366:. 1358:. 1344:. 1340:. 1310:, 1298:, 1275:. 1267:. 1259:. 1249:14 1247:. 1243:. 1216:. 1212:. 1189:. 1179:. 1167:25 1165:. 1161:. 1138:. 1128:22 1126:. 1078:. 1068:40 1066:. 1049:17 1047:. 1024:. 1014:20 1012:. 987:38 985:. 958:. 931:. 885:. 875:20 873:. 850:. 842:. 832:65 830:. 826:. 784:37 782:. 759:. 747:. 743:. 700:56 698:. 694:. 671:. 661:18 659:. 647:^ 633:. 623:25 621:. 609:^ 580:. 570:26 568:. 545:. 533:. 529:. 465:44 463:. 290:. 119:, 49:, 41:, 1725:. 1703:. 1674:. 1646:. 1624:. 1590:. 1560:. 1548:: 1514:. 1492:: 1484:: 1457:. 1453:: 1426:. 1404:: 1374:. 1352:: 1346:6 1306:: 1283:. 1255:: 1228:. 1218:5 1197:. 1183:: 1173:: 1146:. 1134:: 1111:. 1086:. 1074:: 1032:. 1020:: 997:. 993:: 970:. 966:: 943:. 939:: 916:. 912:: 893:. 881:: 858:. 838:: 811:. 786:. 767:. 755:: 710:. 706:: 679:. 667:: 641:. 629:: 588:. 576:: 553:. 541:: 535:9 475:. 471:: 254:1 248:n 228:n 208:n 34:. 20:)

Index

Penchant
Preference (disambiguation)
psychology
economics
philosophy
alternatives
decision theory
Ordinal Priority Approach
desires
insolvency
psychology
decision-making
choices
Preference (economics)
economics
social sciences
happiness
gratification
utility
World War II
neoclassical economics
Rational Choice Theory
transitivity
Completeness (statistics)

utility function
Expected Utility Theory (EUT)
John von Neumann
Oskar Morgenstern
axioms

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