Do intransitive choices reflect genuinely context-dependent preferences?

A multitude of theories on decision making suppose that individuals choose between different prospects by placing a value, or utility, on these prospects and selecting whichever prospect has the highest value. If decisions were at all times value-based, then choices should always be transitive. Transitivity holds that, if prospect A is preferred over prospect B, and B is preferred over C, A should also be preferred over C. Despite its intuitive appeal, individuals often show striking violations of transitivity. Intransitive decisions could be the consequence of asymmetrically distributed errors made during the implementation of transitively organized values because individuals may be more likely to erroneously choose against their true preference when the discrimination between the prospects' values is difficult compared to situations where the prospect with the highest value is clearly and easily detectable. Alternatively, intransitive choices may reflect genuinely context-dependent preferences because individuals may compare the options' multiple attributes separately, not in an integrated fashion. This chapter replicates intransitive choices in a risky decision-making task, and presents a novel analysis that argues against the noisy implementation of transitive value account. It argues that choices reflect truly intransitive and context-dependent preferences, and discusses several possible explanations why individuals make decisions in such a way.