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. https://resolver.caltech.edu/CaltechAUTHORS:20160804-103451578
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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 | |||||||||
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| 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. | |||||||||
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| Issue or Number: | 7 | |||||||||
| Record Number: | CaltechAUTHORS:20160804-103451578 | |||||||||
| Persistent URL: | https://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: | 03 Oct 2019 10:22 |
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