CaltechAUTHORS
  A Caltech Library Service

Experiments on Decisions under Uncertainty: A Theoretical Framework

Shmaya, Eran and Yariv, Leeat (2016) Experiments on Decisions under Uncertainty: A Theoretical Framework. American Economic Review, 106 (7). pp. 1775-1801. ISSN 0002-8282. http://resolver.caltech.edu/CaltechAUTHORS:20160804-103451578

[img] PDF
See Usage Policy.

1064Kb

Use this Persistent URL to link to this item: http://resolver.caltech.edu/CaltechAUTHORS:20160804-103451578

Abstract

The analysis of lab data entails a joint test of the underlying theory and of subjects' conjectures regarding the experimental design itself, how subjects frame the experiment. We provide a theoretical framework for analyzing such conjectures. We use experiments of decision making under uncertainty as a case study. Absent restrictions on subjects' framing of the experiment, we show that any behavior is consistent with standard updating ("anything goes"), including those suggestive of anomalies such as overconfidence, excess belief stickiness, etc. When the experimental protocol restricts subjects' conjectures (plausibly, by generating information during the experiment), standard updating has nontrivial testable implications.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/1257/aer.20120978DOIArticle
https://www.aeaweb.org/articles?id=10.1257/aer.20120978PublisherArticle
Additional Information:© 2016 American Economic Association. We thank Alessandro Lizzeri for numerous comments on an earlier version of the paper. Christopher Chambers, Federico Echenique, and Matthew O. Jackson provided very helpful suggestions. Financial support from the National Science Foundation (SES 0963583) and the Gordon and Betty Moore Foundation (grant 1158) is gratefully acknowledged.
Funders:
Funding AgencyGrant Number
NSFSES 0963583
Gordon and Betty Moore Foundation1158
Record Number:CaltechAUTHORS:20160804-103451578
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20160804-103451578
Official Citation:Shmaya, Eran and Leeat Yariv. 2016. "Experiments on Decisions under Uncertainty: A Theoretical Framework." American Economic Review, 106(7): 1775-1801. DOI: 10.1257/aer.20120978
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:69438
Collection:CaltechAUTHORS
Deposited By: Ruth Sustaita
Deposited On:04 Aug 2016 19:04
Last Modified:04 Aug 2016 19:04

Repository Staff Only: item control page