Separating Bayesian Updating from Non-Probabilistic Reasoning: An Experimental Investigation

Dan Levin (), James Peck and Asen Ivanov ()

American Economic Journal: Microeconomics, 2016, vol. 8, issue 2, 39-60

Abstract: Through a series of decision tasks involving colored cards, we provide separate measures of Bayesian updating and non-probabilistic reasoning skills. We apply these measures to (and are the first to study) a common-value Dutch auction. This format is more salient than the strategically equivalent first-price auction and silent Dutch formats in hinting that one should condition one's estimate of the value on having the highest bid. Both Bayesian updating skills and non-probabilistic reasoning skills are shown to help subjects correct for the winner's curse, as does the saliency of the active-clock Dutch format. (JEL D12, D44, D83)

JEL-codes: D12 D44 D83 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mic.20140008
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Citations: View citations in EconPapers (20)

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Working Paper: Separating Bayesian Updating from Non-Probabilistic Reasoning: An Experimental Investigation (2015)
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