Does Repetition Improve Consistency?

Much experimental effort has been expended in attempts to establish the relative superiority of Expected Utility theory and the many recently-developed alternatives as descriptions of the behaviour of subjects in risky choice decision problems. The cumulative evidence shows clearly that there is a great deal of noise in the experimental data, which makes it difficult to identify the ‘best’ description of such behaviour. This paper reports on an experiment which seeks to determine whether such noise is relatively transitory and decays with experience and repetition, and thus whether a clearly ‘best’ theory emerges as a result of such repetition. We find that for some subjects this does indeed appear to be the case, while for other subjects the noise remains high and the identification of the underlying preference function remains difficult. Copyright Kluwer Academic Publishers 2001