Dynamic Preference “Reversals” and Time Inconsistency
2026-04-27
We study the possibility of identifying time-inconsistent preferences in empirical designs where preferences are elicited in advance at time 0 and then again at time 1, after the agent receives additional information. For single-peaked preferences, time consistency is rejected only when the time-1 ranking between a pair of alternatives is always the reverse of the time-0 ranking. We establish variations and generalizations of this result. Since such stark reversals are rarely observed, choice-revision designs require stronger identification assumptions than perhaps previously appreciated. But we show that time inconsistency is identifiable in environments where preferences over alternatives can be “priced out.” (JEL D11, D15, D83, D86)