Multiple-switching behavior in choice-list elicitation of risk preference

This study examines multiple-switching behavior (MSB) in choice-list elicitation of risk preference from the perspectives of stochastic choice. We distinguish between “regular” and “irregular” MSB, and find that subjects with more irregular MSB are more likely to violate first-order stochastic dominance. In contrast, subjects with more regular MSB are more likely to concurrently exhibit non-expected utility behavior and reduce compound lottery, and to deliberately randomize in repeated choice. Our results suggest the need to diagnose the quality of MSB when applying choice-list elicitations, and distinguish stochastic choice models including random utility and deliberate randomization.