Making Case-Based Decision Theory Directly Observable

Han Bleichrodt, Martin Filko, Amit Kothiyal and Peter Wakker

American Economic Journal: Microeconomics, 2017, vol. 9, issue 1, 123-51

Abstract: Case-based decision theory (CBDT) provided a new way of revealing preferences, with decisions under uncertainty determined by similarities with cases in memory. This paper introduces a method to measure CBDT that requires no commitment to parametric families and that relates directly to decisions. Thus, CBDT becomes directly observable and can be used in prescriptive applications. Two experiments on real estate investments demonstrate the feasibility of our method. Our implementation of real incentives not only avoids the income effect, but also avoids interactions between different memories. We confirm CBDT's predictions except for one violation of separability of cases in memory.

JEL-codes: D12 D81 R30 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mic.20150172
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Citations: View citations in EconPapers (10)

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