Nielsen, Kirby and Rehbeck, John (2022) When Choices Are Mistakes. American Economic Review, 112 (7). pp. 2237-2268. ISSN 0002-8282. doi:10.1257/aer.20201550. https://resolver.caltech.edu/CaltechAUTHORS:20220912-173430100
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Abstract
Using a laboratory experiment, we identify whether decision-makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their axiom preferences. In instances of conflict, we give subjects the opportunity to re-evaluate their decisions. We find that many individuals want to follow canonical axioms and revise their choices to be consistent with the axioms. In a shorter online experiment, we show correlations of mistakes with response times and measures of cognition.
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| Additional Information: | We thank Marina Agranov, Dan Benjamin, Doug Bernheim, Christopher P. Chambers, Josh Dean, Paul Feldman, Shane Frederick, Tzachi Gilboa, Ben Grodeck, Yoram Halevy, Paul J. Healy, Miles Kimball, Jennifer Manly, Muriel Niederle, Ryan Oprea, Lee Pang, Collin Raymond, Frank Schilbach, Joel Sobel, and Colin Sullivan for many helpful comments and suggestions. We also thank the two coeditors, and three anonymous referees for their very helpful comments and suggestions. A previous version of this paper was circulated with the title “Are Axioms Normative? Eliciting Axiom Preferences and Resolving Conflicts with Lottery Choices.” This study was reviewed and granted exemption by the Institutional Review Boards at the Ohio State University (2019E0225), Stanford University (IRB-50344) and California Institute of Technology (21-1062) We thank the National Science Foundation for research support; this work was sponsored by NSF-2049749 and NSF-2049748. | |||||||||
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| Subject Keywords: | C91 Design of Experiments: Laboratory, Individual D12 Consumer Economics: Empirical Analysis D44 Auctions D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making | |||||||||
| Issue or Number: | 7 | |||||||||
| Classification Code: | C91; D12; D44; D91; | |||||||||
| DOI: | 10.1257/aer.20201550 | |||||||||
| Record Number: | CaltechAUTHORS:20220912-173430100 | |||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20220912-173430100 | |||||||||
| Official Citation: | Nielsen, Kirby, and John Rehbeck. 2022. "When Choices Are Mistakes." American Economic Review, 112 (7): 2237-68. DOI: 10.1257/aer.20201550 | |||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | |||||||||
| ID Code: | 116895 | |||||||||
| Collection: | CaltechAUTHORS | |||||||||
| Deposited By: | Tony Diaz | |||||||||
| Deposited On: | 28 Sep 2022 18:02 | |||||||||
| Last Modified: | 28 Sep 2022 18:02 |
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