How Do Behavioral Assumptions Affect Structural Inference? Evidence from a Laboratory Experiment
Daniel Houser () and
Joachim Winter ()
Munich Reprints in Economics from University of Munich, Department of Economics
We use laboratory experiments to investigate the effect that assuming rational expectations has on structural inference in a dynamic discrete decision problem. Our design induces preferences up to the subjective rate of time preference, leaving unrestricted both this parameter and subjects’ decision rules. We estimate subjects’ discount rates under the assumption that all subjects use the rational expectations decision rule, and under weaker behavioral assumptions that allow decision rule heterogeneity. We find that certain sophisticated heuristics fit subjects’ decisions statistically significantly better than rational expectations. However, the rational expectations assumption does not distort inferences about the cross-sectional discount rate distribution.
References: Add references at CitEc
Citations View citations in EconPapers (17) Track citations by RSS feed
Published in Journal of Business and Economic Statistics 1 22(2004): pp. 64-79
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: How Do Behavioral Assumptions Affect Structural Inference? Evidence from a Laboratory Experiment (2004)
Working Paper: How Do Behavioral Assumptions Affect Structural Inference? Evidence From A Laboratory Experiment (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:19372
Access Statistics for this paper
More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().