Axiom Preferences and Choice Mistakes under Risk

Fabian Herweg (), Svenja Hippel (), Daniel Müller () and Fabio Römeis ()
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Fabian Herweg: University of Bayreuth
Svenja Hippel: University of Bonn
Daniel Müller: University of Würzburg
Fabio Römeis: University of Würzburg

No 326, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for a clear-cut interpretation on the decision level, we find that roughly 70% of axiom violations are intentional whereas only 30% are mistakes. On the subject level we can clearly categorize almost half of our subjects. Among those, roughly 24% are rational expected utility maximizers, 24% make occasional mistakes, and 52% refute the normative value of these axioms.

Keywords: Axiomatic rationality; Choice under risk; Context-dependent preferences; Mistakes; Regret theory (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 D91 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2024-07
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:326

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