Review of Behavioral Economics > Vol 5 > Issue 3-4

Constructed Preferences, Rationality, and Choice Architecture

Craig R. M. McKenzie, UC San Diego, USA, , Shlomi Sher, Pomona College, USA, Lim M. Leong, UC San Diego, USA, Johannes Müller-Trede, IESE Business School, Spain
Suggested Citation
Craig R. M. McKenzie, Shlomi Sher, Lim M. Leong and Johannes Müller-Trede (2018), "Constructed Preferences, Rationality, and Choice Architecture", Review of Behavioral Economics: Vol. 5: No. 3-4, pp 337-360.

Publication Date: 31 Dec 2018
© 2018 C. R. M. McKenzie, S. Sher, L. M. Leong, and J. Müller-Trede
Behavioral Economics,  Biases,  Psychology


Open Access

This is published under the terms of CC-BY.

In this article:
1. Preference Construction in Context 
2. Cues in the Choice Context 
3. Implications for Choice Architecture 
4. Conclusion 


Preferences must be constructed at least some of the time. This, by itself, is not problematic for rationality. At issue is whether the construction is done in a reasonable manner. The common view is that preference construction violates coherence principles that are basic requirements of rational choice. However, traditional coherence principles are static and implicitly assume that the choice context provides no relevant information. In lab experiments, decision makers often evaluate or choose between options that are unfamiliar or even fictitious, and they may look to the context for choice-relevant cues that help them update their beliefs and construct their preferences. We review evidence that a number of apparent “biases” in decision making stem from adaptive sensitivity to subtle contextual cues. These context effects are dynamically coherent, in that preference-updating is coordinated with reasonable context-dependent belief-updating. This perspective on preference construction not only provides a different view of the psychology and rationality of decision making, it also suggests a different approach to choice architecture. Whereas the traditional nudge approach tries to engineer specific decision outcomes, often by rerouting apparent biases so that they point in desirable directions, the present approach seeks to facilitate processes in order to help people make rational decisions.



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