The impact of statistical learning on violations of the sure-thing principle
Nicky Nicholls (),
Aylit Romm () and
Journal of Risk and Uncertainty, 2015, vol. 50, issue 2, 97-115
This paper experimentally tests whether violations of Savage’s ( 1954 ) sure-thing principle (STP) decrease through statistical learning. Our subjects repeatedly had to bet on the drawings from an urn with an unknown proportion of differently colored balls. The control group was thereby subjected to learning through mere thought only. In addition, the test group received more and more statistical information over the course of the experiment by observing the color of the ball actually drawn after each bet. We expected that statistical learning would decrease the decision makers’ ambiguity, thereby implying a stronger decrease of STP violations in the test than in the control group. However, our data surprisingly shows that learning by mere thought rather than statistical learning leads to a decrease in STP violations. Copyright Springer Science+Business Media New York 2015
Keywords: Learning; Statistical learning; Sure thing principle; Prospect theory; Independence axiom; C91; D81 (search for similar items in EconPapers)
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Working Paper: The impact of statistical learning on violations of the sure-thing principle (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jrisku:v:50:y:2015:i:2:p:97-115
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