EconPapers    
Economics at your fingertips  
 

How Do Behavioral Assumptions Affect Structural Inference? Evidence from a Laboratory Experiment

Daniel Houser () and Joachim Winter ()

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We use laboratory experiments to investigate the effect that assuming rational expectations has on structural inference in a dynamic discrete decision problem. Our design induces preferences up to the subjective rate of time preference, leaving unrestricted both this parameter and subjects’ decision rules. We estimate subjects’ discount rates under the assumption that all subjects use the rational expectations decision rule, and under weaker behavioral assumptions that allow decision rule heterogeneity. We find that certain sophisticated heuristics fit subjects’ decisions statistically significantly better than rational expectations. However, the rational expectations assumption does not distort inferences about the cross-sectional discount rate distribution.

Date: 2004
References: Add references at CitEc
Citations View citations in EconPapers (14) Track citations by RSS feed

Published in Journal of Business and Economic Statistics 1 22(2004): pp. 64-79

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: How Do Behavioral Assumptions Affect Structural Inference? Evidence from a Laboratory Experiment (2004)
Working Paper: How Do Behavioral Assumptions Affect Structural Inference? Evidence From A Laboratory Experiment (2002) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:lmu:muenar:19372

Access Statistics for this paper

More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Series data maintained by Tamilla Benkelberg ().

 
Page updated 2017-09-04
Handle: RePEc:lmu:muenar:19372