We report the results of an experimental investigation of a key axiom of economic theories of dynamic decision making: namely, that agents plan. Inferences from previous investigations have been confounded with issues concerning the preference functionals of the agents. Here, we present an innovative experimental design which is driven purely by dominance: if preferences satisfy dominance, we can infer whether subjects are planning ahead. We implement two sets of experiments: the first (the Individual Treatment) in which the same player takes decisions both in the present and the future; and the second (the Pairs Treatment) in which different players take decisions at different times. In both contexts, according to economic theory, the players in the present should anticipate the decision of the player in the future. We find that over half the participants in both experimental treatments do not appear to be planning ahead; moreover, their ability to plan ahead does not improve with experience. These findings identify an important lacuna in economic theories, both for individual behaviour and for behaviour in games.
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John Bone & John Hey & John Suckling, 2009.
"Do people plan?,"
Experimental Economics,
Springer, vol. 12(1), pages 12-25, March.
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John Bone & John D Hey & John Suckling, 2007.
"Do People Plan?,"
Discussion Papers
07/31, Department of Economics, University of York.
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John Bone & John D Hey & John Suckling, 2006.
"Do People Plan?,"
Discussion Papers
06/22, Department of Economics, University of York, revised Jul 2007.
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Find related papers by JEL classification: D90 - Microeconomics - - Intertemporal Choice and Growth - - - General D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
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John D. Bone & John D. Hey & John R. Suckling, 2003.
"Do people plan ahead?,"
Applied Economics Letters,
Taylor and Francis Journals, vol. 10(5), pages 277-280, April.
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