Conditional Independence in a Binary Choice Experiment

Nathaniel Wilcox

No 24-15, Working Papers from Department of Economics, Appalachian State University

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 wellknown 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. Key Words: Alternation, Conditional Independence, Choice Under Risk, Discrete Choice, Persistence, Random Problem Selection

JEL-codes: C22 C25 C91 D81 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dcm, nep-ecm, nep-exp and nep-inv
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http://econ.appstate.edu/RePEc/pdf/wp2415.pdf (application/pdf)

Related works:
Journal Article: Conditional independence in a binary choice experiment (2024)
Working Paper: Conditional Independence in a Binary Choice Experiment (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:apl:wpaper:24-15

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