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Conditional Independence in a Binary Choice Experiment

Nathaniel Wilcox

Working Papers from Chapman University, Economic Science Institute

Abstract: Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation. 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 well-known reasons). However, when an experimenter employs contemporary state-of-the-art experimental mechanisms and designs, the current evidence suggests that conditional independence is an acceptable assumption for analyzing data so generated.

Keywords: Alternation; Conditional Independence; Choice Under Risk; Discrete Choice; Persistence; Random Lottery Incentive; Random Lottery Selection; Random Problem Selection; Random Round Payoff (search for similar items in EconPapers)
JEL-codes: C22 C25 C91 D81 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc

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Journal Article: Conditional independence in a binary choice experiment (2024) Downloads
Working Paper: Conditional Independence in a Binary Choice Experiment (2024) Downloads
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