Mixture models of choice under risk
John Hey () and
Peter Moffatt ()
Chapter 1 in Experiments in Economics:Decision Making and Markets, 2018, pp 3-12 from World Scientific Publishing Co. Pte. Ltd.
This paper is concerned with estimating preference functionals for choice under risk from the choice behaviour of individuals. We note that there is heterogeneity in behaviour between individuals and within individuals. By ‘heterogeneity between individuals’ we mean that people are different, in terms of both their preference functionals and their parameters for these functionals. By ‘heterogeneity within individuals’ we mean that the behaviour may be different even by the same individual for the same choice problem. We propose methods of taking into account all forms of heterogeneity, concentrating particularly on using a Mixture Model to capture the heterogeneity of preference functionals.
Keywords: Experimental Economics; Risk; Ambiguity; Markets; Auctions; Bargaining; Econometrics; Methodology (search for similar items in EconPapers)
JEL-codes: C90 (search for similar items in EconPapers)
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Journal Article: Mixture models of choice under risk (2011)
Working Paper: Mixture Models of Choice Under Risk (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789813235816_0001
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