Consistent inconsistencies? Evidence from decision under risk
Hela Maafi and
Jean-Christophe Vergnaud ()
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Conventional economic theory assumes that agents should be consistent across decisions. However, it is often observed that experimental subjects fail to report consistent preferences. So far, these inconsistencies are almost always examined singly. We thus wonder whether the more inconsistent individuals in one task are also more inconsistent in other tasks. We propose an experiment in which subjects are asked to report their preferences over risky bets so as to obtain, for each subject, three measures of inconsistencies: classical preference reversals, framing effects and preference instability. In line with previous experimental findings, subjects are largely inconsistent according to each of these three measures and there are considerable individual differences. The main result is that we find no correlation among these three measures of inconsistency.
Keywords: Heterogeneity; Consistency; Preference reversals; Framing effects (search for similar items in EconPapers)
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Published in Theory and Decision, Springer Verlag, 2016, 80 (4), pp.623-648. ⟨10.1007/s11238-015-9518-8⟩
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Journal Article: Consistent inconsistencies? Evidence from decision under risk (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01306250
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