Empirical tests of stochastic binary choice models
Addison Pan ()
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Addison Pan: Xi’an Jiaotong-Liverpool University
Theory and Decision, 2022, vol. 93, issue 2, No 3, 259-280
Abstract This paper provides an experimental test of stochastic choice models of decisions. Models that admit Fechnerian structure are tested through the repeated pairwise choice problems. Results refute the Fechner hypothesis that characterizing the probability of selecting a given prospect increases in how strongly it is preferred to alternative choices. However, the experimental data lend support to characterizing an individual’s binary choice probability as some scalable functions of the von Neumann–Morgenstern utilities in the risky context.
Keywords: Binary choice probability; Scalability; Fechner model; Strong stochastic transitivity; Human-subjects laboratory experiment (search for similar items in EconPapers)
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