Proceedings of the Annual Meeting of the Cognitive Science Society

Most models of pricing embody a static, deterministic theoryof value where the monetary amount people assign to an itemis computed as a fixed function of its attributes. Preference re-versals — where prices assigned to gambles conflict with pref-erence orders elicited through binary choices – indicate thatthe response processes going into value assessments are impor-tant. In this paper, we additionally show that price responsesare sensitive to time pressure, suggesting a dynamic underlyingcognitive process. We also show that the elicited price distribu-tions can possess strong positive or negative skew, indicatingthat diverging information is used to generate buying versusselling and certainty equivalent prices. We develop a computa-tional cognitive model that predicts these continuous distribu-tions of price responses and how they change over time, show-ing that it can account for the major dynamic and distributionalproperties of prices and decisions.