The results of an eye-tracking experiment designed to study a violation of revealed preference predicted by salience theory are reported. Specifically, individuals will choose a low quality good with a low price level and a high quality good with a high price level, despite the price of the quality premium being held constant. Subjects exhibited a significant numbers of such preference reversals (16.12% of decisions). However, the eye-tracking hypotheses, designed to test the underlying mechanism of salience theory, are all rejected. The implications for salience theory are discussed. More reversals were observed with hypothetical than incentivized choice (22.11% vs. 10.12% of decisions).
|Place of Publication||Copenhagen|
|Publisher||Department of Economics. University of Copenhagen|
|Number of pages||33|
|Publication status||Published - 2015|