Completeness, the most commonly assumed axiom in preference theory, has not received much attention from the experimental literature. Indeed, incomplete preferences model a cognitive phenomenon (an agent's inability to compare alternatives), and therefore cannot be directly revealed through choice behavior. Implementing a solution to this methodological issue recently proposed by Danan [A behavioral model of individual welfare, mimeo EUREQua University Paris 1, 2003], we build an experimental protocol involving choices among menus of lotteries, and reveal cognitive preferences' incompleteness by means of the concept of preference for flexibility. Our experimental protocol is designed to assess the descriptive validity of the completeness axiom, as well as to relate its possible violations to lotteries' riskiness. Two-thirds of the subjects whose choices reveal preferences in accordance with the underlying theory exhibit a strictly positive measure of incompleteness. The observed average measure of incompleteness equals approximately 17 percent and it is significantly greater than 10 percent. We do not find a significant relationship between a lottery's riskiness and its cognitive comparability with certain payoffs.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
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.: