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Who Is (More) Rational?

Syngjoo Choi (), Shachar Kariv (), Wieland Mueller () and Dan Silverman ()
Additional contact information
Shachar Kariv: http://www.univie.ac.at/Wirtschaftswissenschaften
Wieland Mueller: http://www.univie.ac.at/Wirtschaftswissenschaften

Authors registered in the RePEc Author Service: Wieland Müller

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: Revealed preference theory o¤ers a criterion for decision-making quality: if decisions are high quality then there exists a utility function that the choices maximize. We conduct a large-scale ?eld experiment that enables us to test subjects?choices for consistency with utility maximization and to combine the experimental data with a wide range of individual socioeco-nomic information for the subjects. There is considerable heterogeneity in subjects?consistency scores: high-income and high-education subjects display greater levels of consistency than low- income and low-education subjects, men are more consistent than women, and young subjects are more consistent than older subjects. We also ?nd that consistency with utility maximization is strongly related to wealth: a standard deviation increase in the consistency score is associated with 15-19 percent more wealth. This result conditions on socioeconomic variables including current income, education, and family structure, and is little changed when we add controls for past income, risk tolerance and the results of a standard personality test used by psychologists.

JEL-codes: C93 D01 D03 D12 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2011-01
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http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1105.pdf (application/pdf)

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Journal Article: Who Is (More) Rational? (2014) Downloads
Working Paper: Who Is (More) Rational? (2011) Downloads
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Persistent link: http://EconPapers.repec.org/RePEc:vie:viennp:1105

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