Measuring subjective decision confidence

Sara Arts, Qiyan Ong and Jianying Qiu

MPRA Paper from University Library of Munich, Germany

Abstract: Information on decision confidence provides important insights into decision-making. In place of self-reported confidence statements in earlier studies, this study examines an incentivized approach to elicit quantitative decision confidence experimentally and theoretically. This approach allows the individual to choose randomization probabilities according to which she receives each option instead of committing to one option as in standard binary choices. We demonstrate theoretically that randomization probabilities reveal the individual's decision confidence level. In an experiment that elicited both randomization probabilities and confidence statements about standard binary choices from subjects, we find that randomization probabilities varied systematically with decision confidence and are a viable measure of decision confidence. Our study contributes to the discussion of convex preference by relating preference for randomization to an intuitive psychological concept of decision confidence.

Keywords: decision confidence; randomization; incentivized approach (search for similar items in EconPapers)
JEL-codes: B41 C91 D81 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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