Note on "Small Feedback-based Decisions and Their Limited Correspondence to Description-based Decisions"
AbstractBarron and Erev (2003) report experimental results revealing differences in risk attitude in small feedback-based problems as opposed to conventional description-based problems. This note shows that theoretical predictions drawing on a simple decision rule, known as the heuristic of relative probability comparisons (HRPC), fit the experimental data in Barron and Erev (2003) surprisingly well: even in the choice situation where the HRPC predicts an exact indifference the actual distribution of subject responses was 49% to 51%.
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Date of creation: Oct 2003
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Heuristic of relative probability comparisons; Feedback-based decisions;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-01 (All new papers)
- NEP-CBE-2004-02-01 (Cognitive & Behavioural Economics)
- NEP-EXP-2004-02-01 (Experimental Economics)
- NEP-MIC-2004-02-01 (Microeconomics)
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