Consistent inconsistencies? Evidence from decision under risk

Guillaume Hollard, Hela Maafi and Jean-Christophe Vergnaud

Theory and Decision, 2016, vol. 80, issue 4, No 6, 623-648

Abstract: Abstract Conventional economic theory assumes that agents should be consistent across decisions. However, it is often observed that experimental subjects fail to report consistent preferences. So far, these inconsistencies are almost always examined singly. We thus wonder whether the more inconsistent individuals in one task are also more inconsistent in other tasks. We propose an experiment in which subjects are asked to report their preferences over risky bets so as to obtain, for each subject, three measures of inconsistencies: classical preference reversals, framing effects and preference instability. In line with previous experimental findings, subjects are largely inconsistent according to each of these three measures and there are considerable individual differences. The main result is that we find no correlation among these three measures of inconsistency.

Keywords: Heterogeneity; Consistency; Preference reversals; Framing effects (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11238-015-9518-8

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