Do People Plan?
John Hey () and
Discussion Papers from Department of Economics, University of York
We report the results of an experimental investigation of a key axiom of economic theories of dynamic decision making – namely, that agents plan. Inferences from previous investigations have been confounded with issues concerning the preference functionals of the agents. Here, we present an innovative experimental design which is driven purely by dominance: if preferences satisfy dominance, we can infer whether subjects are planning ahead. We implement two sets of experiments: the first (the Individual Treatment) in which the same player takes decisions both in the present and the future; and the second the Pairs Treatment) in which different players take decisions at different times. In both contexts, according to economic theory, the players in the present should anticipate the decision of the player in the future. We find that over half the participants in both experimental treatments do not appear to be planning ahead; moreover, their ability to plan ahead does not improve with experience. These findings identify an important lacuna in economic theories, both for individual behaviour and for behaviour in games.
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2006-11, Revised 2007-07
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Journal Article: Do people plan? (2009)
Working Paper: Do People Plan? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:yor:yorken:06/22
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