Advanced Search
MyIDEAS: Login to save this article or follow this journal

Who Is (More) Rational?

Contents:

Author Info

  • Syngjoo Choi
  • Shachar Kariv
  • Wieland M?ller
  • Dan Silverman

Abstract

Revealed preference theory offers a criterion for decision-making quality: if decisions are high quality then there exists a utility function the choices maximize. We conduct a large-scale experiment to test for consistency with utility maximization. Consistency scores vary markedly within and across socioeconomic groups. In particular, consistency is strongly related to wealth: a standard deviation increase in consistency is associated with 15-19 percent more household wealth. This association is quantitatively robust to conditioning on correlates of unobserved constraints, preferences, and beliefs. Consistency with utility maximization under laboratory conditions thus captures decision-making ability that applies across domains and influences important real-world outcomes.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.104.6.1518
Download Restriction: no

File URL: http://www.aeaweb.org/aer/app/10406/20110458_app.pdf
Download Restriction: no

File URL: http://www.aeaweb.org/aer/data/10406/20110458_data.zip
Download Restriction: no

File URL: http://www.aeaweb.org/aer/ds/10406/20110458_ds.zip
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 104 (2014)
Issue (Month): 6 (June)
Pages: 1518-50

as in new window
Handle: RePEc:aea:aecrev:v:104:y:2014:i:6:p:1518-50

Note: DOI: 10.1257/aer.104.6.1518
Contact details of provider:
Email:
Web page: https://www.aeaweb.org/aer/
More information through EDIRC

Order Information:
Web: https://www.aeaweb.org/subscribe.html

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Casper Ewijk & Bas Jacobs & Ruud Mooij, 2007. "Welfare Effects of Fiscal Subsidies on Home Ownership in the Netherlands," De Economist, Springer, vol. 155(3), pages 323-336, September.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Who is rational?
    by Economic Logician in Economic Logic on 2011-03-31 14:34:00
  2. Who Is Consistent?
    by Robin Hanson in Overcoming Bias on 2011-06-28 17:50:30
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jose Apesteguia & Miguel A. Ballester, 2012. "Choice by sequential procedures," Economics Working Papers 1309, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Andrew Leicester & Peter Levell, 2013. "Anti-smoking policies and smoker well-being: evidence from Britain," IFS Working Papers W13/13, Institute for Fiscal Studies.
  3. Cappelen, Alexander W. & Kariv, Shachar & Sørensen, Erik Ø. & Tungodden, Bertil, 2014. "Is There a Development Gap in Rationality?," Discussion Paper Series in Economics 8/2014, Department of Economics, Norwegian School of Economics.
  4. Mark Dean & Daniel Martin, 2011. "Testing for Rationality with Consumption Data: Demographics and Heterogeneity," Working Papers 2011-11, Brown University, Department of Economics.
  5. Halevy, Yoram & Persitz, Dotan & Zrill, Lanny, 2012. "Parametric Recoverability of Preferences," Microeconomics.ca working papers yoram_halevy-2012-20, Vancouver School of Economics, revised 16 Aug 2014.
  6. Vieider, Ferdinand M. & Truong, Nghi & Martinsson, Peter & Pham Khanh Nam & Martinsson, Peter, 2013. "Risk preferences and development revisited: A field experiment in Vietnam," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2013-403, Social Science Research Center Berlin (WZB).
  7. Vieider, Ferdinand M. & Lefebvre, Mathieu & Bouchouicha, Ranoua & Chmura, Thorsten & Hakimov, Rustamdjan & Krawczyk, Michal & Martinsson, Peter, 2013. "Common components of risk and uncertainty attitudes across contexts and domains: Evidence from 30 countries," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2013-402, Social Science Research Center Berlin (WZB).
  8. Jakiela, Pamela & Ozier, Owen, 2012. "Does Africa need a rotten Kin Theorem ? experimental evidence from village economies," Policy Research Working Paper Series 6085, The World Bank.
  9. Faravelli, Marco & Sanchez-Pages, Santiago, 2012. "(Don’t) Make My Vote Count," SIRE Discussion Papers 2012-07, Scottish Institute for Research in Economics (SIRE).
    • Santiago Sanchez-Pages (University of Edinburgh) & Marco Faravelli (School of Economics, University of Queensland, Australia), 2012. "(Don't) Make My Vote Count," ESE Discussion Papers 213, Edinburgh School of Economics, University of Edinburgh.
  10. József Sákovics (University of Edinburgh), 2012. "Revealed cardinal preference," ESE Discussion Papers 212, Edinburgh School of Economics, University of Edinburgh.
  11. Johannes Spinnewijn, 2012. "Heterogeneity, Demand for Insurance and Adverse Selection," CEP Discussion Papers dp1142, Centre for Economic Performance, LSE.
  12. Ariel Rubenstein, 2013. "Response time and decision making: An experimental study," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(5), pages 540-551, September.
  13. Hans-Martin Gaudecker & Arthur Soest & Erik Wengström, 2012. "Experts in experiments," Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 159-190, October.
  14. Yang, Xiaojun & Carlsson, Fredrik, 2012. "Intra-household decisions making on intertemporal choices: An experimental study in rural China," Working Papers in Economics 537, University of Gothenburg, Department of Economics.
  15. Raymond Fisman & Pamela Jakiela & Shachar Kariv, 2014. "The Distributional Preferences of Americans," NBER Working Papers 20145, National Bureau of Economic Research, Inc.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Economic Logic blog

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:104:y:2014:i:6:p:1518-50. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.