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functionals from round to round. Instead, we focus on choice problems allowing for direct tests of independence and coalescing. We … show that variability of responses as well as violations of independence and coalescing decrease from earlier to later …
Persistent link: https://www.econbiz.de/10010486756
A seminal theorem due to Blackwell (1951) shows that every Bayesian decision-maker prefers an informative signal Y to another signal X if and only if Y is statistically sufficient for X. Sufficiency is an unduly strong requirement in most economic problems because it does not incorporate any...
Persistent link: https://www.econbiz.de/10014046524
This note presents an algorithm that extends a binary choice model to choice among multiple alternatives. Both neoclassical microeconomic theory and Luce choice model are consistent with the proposed algorithm. The algorithm is compatible with several empirical findings (asymmetric dominance and...
Persistent link: https://www.econbiz.de/10014204360
Probabilistic preference models predict that a subject makes different choices with different probabilities in repeatedly experiments with the same stimuli. This paper explains why. First, we prove that a gamble is a statistical ensemble or sample function of a random field with canonical...
Persistent link: https://www.econbiz.de/10013113294
Most decisions in life are gambles. Should I speed up or slow down as I approach the yellow traffic light ahead? Should I invest in the stock market or in treasury bills? Should I undergo surgery or radiation therapy to treat my tumor? From mundane choices rendered with scarcely a moment's...
Persistent link: https://www.econbiz.de/10014055135
In many decisions, we are not only uncertain about the predicted outcomes of decision alternatives but also about stakeholder preferences regarding these outcomes. Further information collection may reduce uncertainties, but is costly. We present and apply a framework to identify the most...
Persistent link: https://www.econbiz.de/10014358568
There is wide-ranging evidence, much of it deriving from economics experiments, of ‘anomalies’ in behaviour that challenge standard preference theories. This paper explores the implications of these anomalies for preference elicitation methods. Because methods that are used to inform public...
Persistent link: https://www.econbiz.de/10002459530
This paper presents a new incentive compatible method for measuring confidence in own knowledge. This method consists of two parts. First, an individual answers several general knowledge questions. Second, the individual chooses among three alternatives: 1) one question is selected at random and...
Persistent link: https://www.econbiz.de/10014220558
Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1800 first-year undergraduate economics and business students in Uruguay to...
Persistent link: https://www.econbiz.de/10014084025
Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1,576 first-year undergraduate economics and business students in Uruguay to...
Persistent link: https://www.econbiz.de/10013250356