Conditional independence in a binary choice experiment

Nathaniel Wilcox

Journal of Risk and Uncertainty, 2024, vol. 68, issue 3, No 1, 205-225

Abstract: Abstract Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation of choice functions. I test this assumption using data from a new experiment designed for this purpose. Within the limits of the experiment’s identifying restriction and designed power to detect deviations from conditional independence, conditional independence is not rejected. In naturally occurring data, concerns about violations of conditional independence are certainly proper and well-taken (for well-known reasons). However, when an experimenter employs the particular experimental mechanisms and designs used here, the findings suggest that conditional independence is an acceptable assumption for analyzing data so generated.

Keywords: Alternation; Conditional independence; Choice under risk; Discrete choice; Persistence; Random problem selection; C22; C25; C91; D81 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Conditional Independence in a Binary Choice Experiment (2024)
Working Paper: Conditional Independence in a Binary Choice Experiment (2018)
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DOI: 10.1007/s11166-024-09431-9

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