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Definition 1

Desired choice alternatives, ordered on the basis of utility.

Source: Behavioral Science Lab, 2017

Definition 2

In economics, preferences are evident in theoretically optimal choices or real (behavioral) choices when people decide between alternatives. Preferences also imply an ordering of different options in terms of expected levels of happiness, gratification, utility, etc. (Arrow, 1958). Preferences are sometimes elicited in survey research, which may be associated with a range of problems, such as the hypothetical bias, when stated preferences are different from those expressed in actual choices. Armin Falk and colleagues have developed cross-culturally valid survey questions that are good predictors of preferences in behavioral experiments. These include questions about risk taking (see prospect theory), social preferences (e.g. about reciprocity) and time discounting (Falk et al., 2012).

Source: Behavioral Economics

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