Are bygones bygones?
Maria Ruiz-Martos () and
No 2010-01, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham
The paper reports an experiment which tests the principle of separability, i.e. that behaviour in a dynamic choice problem is independent of history and of unreachable eventualities. Although this is a well-known principle of orthodox decision theory and central to conventional economic modelling, it has been questioned on grounds suggested by non-expected utility models of choice under risk and by the psychology of affective influences on risk-taking. Our experimental design, which provides between-subjects tests of separability using three treatments in which the history preceding a decision is manipulated, is inspired by these concerns. We expose separability to a clean and harsh test, but find no evidence that it is violated.
Keywords: Separability; history-independence; non-expected utility; risk and affect (search for similar items in EconPapers)
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Journal Article: Are bygones bygones? (2012)
Working Paper: Are bygones bygones? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcdx:2010-01
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