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Are bygones bygones?

Robin Cubitt, Maria Ruiz-Martos () and Chris Starmer

No 2010-01, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: 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)
Date: 2010-01
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Related works:
Journal Article: Are bygones bygones? (2012) Downloads
Working Paper: Are bygones bygones? (2005) Downloads
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