Behavior in a Dynamic Decision Problem: An Analysis of Experimental Evidence Using a Bayesian Type Classification Algorithm
Daniel Houser (),
Michael Keane () and
Kevin McCabe ()
Econometrica, 2004, vol. 72, issue 3, pages 781-822
Different people may use different strategies, or decision rules, when solving complex decision problems. We provide a new Bayesian procedure for drawing inferences about the nature and number of decision rules present in a population, and use it to analyze the behaviors of laboratory subjects confronted with a difficult dynamic stochastic decision problem. Subjects practiced before playing for money. Based on money round decisions, our procedure classifies subjects into three types, which we label "Near Rational,""Fatalist," and "Confused." There is clear evidence of continuity in subjects' behaviors between the practice and money rounds: types who performed best in practice also tended to perform best when playing for money. However, the agreement between practice and money play is far from perfect. The divergences appear to be well explained by a combination of type switching (due to learning and/or increased effort in money play) and errors in our probabilistic type assignments. Copyright The Econometric Society 2004.
References: Add references at CitEc
Citations View citations in EconPapers (68) Track citations by RSS feed
Downloads: (external link)
http://hdl.handle.net/10.1111/j.1468-0262.2004.00512.x link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Behavior in a dynamic decision problem: An analysis of experimental evidence using a bayesian type classification algorithm (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:ecm:emetrp:v:72:y:2004:i:3:p:781-822
Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues
Access Statistics for this article
Econometrica is currently edited by Daron Acemoglu
More articles in Econometrica from Econometric Society Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().