Chapter 10: Real choices and hypothetical choices
The distinction between real choices and hypothetical choices is one that is either completely ignored or is the focal point of intense inter-disciplinary controversy. In some quarters the terminology distinguishes ‘stated preferences’ and ‘revealed preferences’, where the former means preferences revealed by choices when there are no consequences for the decision maker and the latter means preferences revealed when there are consequences for the decision maker. The issues are the same: does it matter if choices are hypothetical or real and, if so, what can be done about it? There are many variants of ‘choice experiments’ in use and the distinction between real and hypothetical choices affects them all. In the context in which the expression is used in this volume, it refers to any situation in which a decision maker is asked to rank or choose from two or more alternatives and where there are several choices to be made in which one or more attributes of the alternatives are varied. In general there are many more attributes than prices that are varied.
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