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Stable Randomization

Agranov, Marina and Healy, Paul J. and Nielsen, Kirby (2020) Stable Randomization. . (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20200727-104128922

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Abstract

We design a laboratory experiment to identify whether randomization behavior represents a stable “type” across different choice environments. In both games and individual choice questions, subjects face twenty simultaneous repetitions of the same choice. Randomization constitutes making different choices across the twenty repetitions. We find that randomization preferences are highly correlated across domains, with a sizable fraction of individuals randomizing in all domains, even in questions that offer a first-order stochastically dominant option. For some mixers, dominated randomization is responsive to intervention. Our results are inconsistent with many preference-based models of randomization, leaving open a role for heuristics and biases.


Item Type:Report or Paper (Working Paper)
Additional Information:We thank Yaron Azrieli, Ryan Oprea, Pietro Ortoleva, Collin Raymond, and John Rehbeck for helpful comments and suggestions. This study was approved by the Institutional Review Board at the Ohio State University.
Subject Keywords:Randomization; Probability matching; Convex preferences; Stochastic choice; Contingent reasoning
Classification Code:JEL: D81, C91, D89
Record Number:CaltechAUTHORS:20200727-104128922
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20200727-104128922
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:104591
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:28 Jul 2020 16:13
Last Modified:28 Jul 2020 16:13

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