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Measuring subjective decision confidence

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  • Arts, Sara
  • Ong, Qiyan
  • Qiu, Jianying

Abstract

We examine whether the way individuals randomize between options captures their decision confidence. In two experiments in which subjects face pairs of options (a lottery and a varying sure payment), we allow subjects to choose randomization probabilities according to which they would receive each option. Separately, we obtain two measures of self-reported decision confidence for choosing between the two options. The randomization probabilities are well correlated and correspond with absolute levels of self-reported confidence measures. This relationship is robust to two exogenous manipulations of decision confidence, where we vary the complexity of the lottery and subjects' experience with the lottery, consistent with the predictions of two different theoretical frameworks incorporating preference uncertainty. Our findings suggest that randomization probabilities could serve as an incentivized quantitative measure of decision confidence.

Suggested Citation

  • Arts, Sara & Ong, Qiyan & Qiu, Jianying, 2020. "Measuring subjective decision confidence," MPRA Paper 117907, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:117907
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    References listed on IDEAS

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    More about this item

    Keywords

    decision confidence; randomization; incentivized approach;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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