Do decision makers have subjective probabilities? An experimental test

David Ronayne, Roberto Veneziani and William Zame

No ESMT-22-03, ESMT Research Working Papers from ESMT European School of Management and Technology

Abstract: Anscombe & Aumann (1963) offer a definition of subjective probability in terms of comparisons with objective probabilities. That definition - which has provided the basis for much of the succeeding work on subjective probability - presumes that the subjective probability of an event is independent of the prize consequences of that event, a property we term Prize Independence. We design experiments to test Prize Independence and find that a large fraction of our subjects violate it; thus, they do not have subjective probabilities. These findings raise questions about the empirical relevance of much of the literature on subjective probability.

Keywords: subjective probability; choice under uncertainty; online experiments (search for similar items in EconPapers)
JEL-codes: D01 D81 D84 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2022-06-21
New Economics Papers: this item is included in nep-dcm, nep-dem, nep-exp and nep-upt
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Related works:
Working Paper: Do Decision Makers Have Subjective Probabilities? An Experimental Test (2022)
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