Intrinsic Variability in Group and Individual Decision Making

The paper examines the random preference model, which can explain inherent variability of preferences in managerial and individual decision making and provides axiomatizations for the utility components of two such models differentiated by the structure of core preferences: expected utility (EU) and betweenness‐like preferences. We then examine the possibility of violations of weak stochastic transitivity for these models and for a model with core dual EU preferences. Such violations correspond to the existence of Condorcet cycles, and therefore, the analysis has implications for managerial decision making and for majority rule voting. The paper also investigates implications of its findings for two popular experimental settings. This paper was accepted by James Smith, decision analysis.