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When Choices Are Mistakes

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.


Item Type:Article
Related URLs:
URLURL TypeDescription
https://doi.org/10.1257/aer.20201550DOIArticle
https://resolver.caltech.edu/CaltechAUTHORS:20200727-123702668Related ItemWorking Paper
ORCID:
AuthorORCID
Nielsen, Kirby0000-0003-4536-1021
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.
Funders:
Funding AgencyGrant Number
NSFSES-2049749
NSFSES-2049748
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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