Are preferences complete? An experimental measurement of indecisiveness under risk
AbstractWe propose an experimental design allowing a behavioral test of the axiom of completeness of individual preferences. The central feature of our design consists in enabling subjects to postpone commitment at a small cost. Our main result is that preferences are significantly incomplete. We use lotteries as choice alternatives and we find that risk aversion is globally robust to preference incompleteness.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2006-01.
Length: 43 pages
Date of creation: Aug 2006
Date of revision:
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-2006-08-26 (All new papers)
- NEP-CBE-2006-08-26 (Cognitive & Behavioural Economics)
- NEP-EXP-2006-08-26 (Experimental Economics)
- NEP-UPT-2006-08-26 (Utility Models & Prospect Theory)
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