Revealed Incomplete Preferences

Kirby Nielsen and Luca Rigotti

Papers from arXiv.org

Abstract: We elicit incomplete preferences over monetary gambles with subjective uncertainty. Subjects rank gambles, and these rankings are used to estimate preferences; payments are based on estimated preferences. About 40\% of subjects express incompleteness, but they do so infrequently. Incompleteness is similar for individuals with precise and imprecise beliefs, and in an environment with objective uncertainty, suggesting that it results from imprecise tastes more than imprecise beliefs. When we force subjects to choose, we observe more inconsistencies and preference reversals. Evidence suggests there is incompleteness that is indirectly revealed -- in up to 98\% of subjects -- in addition to what we directly measure.

Date: 2022-05, Revised 2022-10
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-upt
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