Forecasting economic decisions under risk: The predictive importance of choice-process data
Steffen Mueller (),
Patrick Ring () and
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Patrick Ring: Social and Behavioral Approaches to Global Problems, Kiel Institute for the World Economy
Maria Schmidt: Department of Psychology, Kiel University
No 66, Working Papers from Chair for Economic Policy, University of Hamburg
We investigate various statistical methods for forecasting risky choices and identify important decision predictors. Subjects (n=44) are presented a series of 50/50 gambles that each involves a potential gain and a potential loss, and subjects can choose to either accept or reject a displayed lottery. From this data, we use information on 8800 individual lottery gambles and specify four predictor-sets that include different combinations of input categories: lottery design, socioeconomic characteristics, past gambling behavior, eye-movements, and various psychophysiological measures that are recorded during the first three seconds of lottery-information processing. The results of our forecasting experiment show that choice-process data can effectively be used to forecast risky gambling decisions; however, we find large differences among models’ forecasting capabilities with respect to subjects, predictor-sets, and lottery payoff structures.
Keywords: Forecasting; lottery; risk; choice-process tracing; experiments; machine learning; decision theory (search for similar items in EconPapers)
JEL-codes: C44 C45 C53 D87 D91 (search for similar items in EconPapers)
Pages: 76 pages
New Economics Papers: this item is included in nep-big, nep-cmp, nep-exp and nep-for
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Published in Hamburg Contemporary Economic Discussions, Issue 66, 2019
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http://www.hced.uni-hamburg.de/WorkingPapers/HCED-066.pdf First Version, 2019 (application/pdf)
Working Paper: Excited and aroused: The predictive importance of simple choice process metrics (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hce:wpaper:066
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