Do subjects remember the past?

John Hey and Jinkwon Lee

Applied Economics, 2005, vol. 37, issue 1, 9-18

Abstract: In many experiments, experimenters use the random lottery incentive mechanism and ask many questions to each subject. That is, at the end of the experiment, just one of the questions is picked at random, and the subject paid on the basis of their answer to this one question. The idea is that subjects should separate the various questions and reply to each as if it were a separate question. This procedure is methodologically sound if the subjects' preferences obey Expected Utility (EU) theory (which implies a form of separation), but if they do not, this incentive mechanism is open to criticism. Indeed many referees use this argument against the research: they argue that subjects do not consider questions separately. If the questions are revealed to the subjects one by one, then the appropriate alternative hypothesis is that their behaviour evolves with the questions. Here this hypothesis is tested: that the questions already answered affect the answers to the subsequent questions. The analysis shows that this is generally not the case. This finding is of importance not only for the experimental community, but also for the wider community of economists - who typically, when analysing economic data, have to assume some kind of separation of present from past behaviour. The analysis indicates that such an assumption is defensible. An experimental defence of a procedure used widely in non-experimental empirical economics research is provided.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/0003684042000286124 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:37:y:2005:i:1:p:9-18

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/0003684042000286124

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().