"Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences

In six experiments we show that initial valuations of familiar products and simple hedonic experiences are strongly inuenced by arbitrary “anchors ” (some-times derived from a person’s social security number). Because subsequent valua-tions are also coherent with respect to salient differences in perceived quality or quantity of these products and experiences, the entire pattern of valuations can easily create an illusion of order, as if it is being generated by stable underlying preferences. The experiments show that this combinationof coherent arbitrariness (1) cannot be interpreted as a rational response to information, (2) does not decrease as a result of experience with a good, (3) is not necessarily…