| Summary: | The classic
preference reversal phenomenon, where monetary evaluations contradict risky
choices, has been argued to arise due to a focus on outcomes during the
evaluation of alternatives, leading to overpricing of long-shot options. Such
an explanation makes the implicit assumption that attentional shifts drive the
phenomenon. We conducted an eye-tracking study to causally test this hypothesis
by comparing a treatment based on cardinal, monetary evaluations with a
different treatment avoiding a monetary frame. We find a significant treatment
effect in the form of a shift in attention toward outcomes (relative to
probabilities) when evaluations are monetary. Our evidence suggests that
attentional shifts resulting from the monetary frame of evaluations are a
driver of preference reversals.
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