Who Is (More) Rational?
AbstractRevealed preference theory o¤ers a criterion for decision-making quality: if decisions are high quality then there exists a utility function that the choices maximize. We conduct a large-scale ?eld experiment that enables us to test subjects?choices for consistency with utility maximization and to combine the experimental data with a wide range of individual socioeco-nomic information for the subjects. There is considerable heterogeneity in subjects?consistency scores: high-income and high-education subjects display greater levels of consistency than low- income and low-education subjects, men are more consistent than women, and young subjects are more consistent than older subjects. We also ?nd that consistency with utility maximization is strongly related to wealth: a standard deviation increase in the consistency score is associated with 15-19 percent more wealth. This result conditions on socioeconomic variables including current income, education, and family structure, and is little changed when we add controls for past income, risk tolerance and the results of a standard personality test used by psychologists.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 1105.
Date of creation: Jan 2011
Date of revision:
Contact details of provider:
Web page: http://www.univie.ac.at/vwl
Other versions of this item:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-12 (All new papers)
- NEP-CBE-2011-03-12 (Cognitive & Behavioural Economics)
- NEP-EXP-2011-03-12 (Experimental Economics)
- NEP-UPT-2011-03-12 (Utility Models & Prospect Theory)
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.:
- Casper Ewijk & Bas Jacobs & Ruud Mooij, 2007. "Welfare Effects of Fiscal Subsidies on Home Ownership in the Netherlands," De Economist, Springer, vol. 155(3), pages 323-336, September.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Who is rational?
by Economic Logician in Economic Logic on 2011-03-31 14:34:00
- Who Is Consistent?
by Robin Hanson in Overcoming Bias on 2011-06-28 17:50:30
- Sákovics, József, 2012.
"Revealed cardinal preference,"
SIRE Discussion Papers
2012-02, Scottish Institute for Research in Economics (SIRE).
- Sabrina Bruyneel & Laurens Cherchye & Sam Cosaert & Bram De Rock & Siegfried Dewitte, 2012.
"Are the Smart Kids More Rational ?,"
Working Papers ECARES
ECARES 2012-050, ULB -- Universite Libre de Bruxelles.
- Bruyneel, Sabrina & Cherchye, Laurens & Cosaert, Sam & De Rock, Bram & Dewitte, Siegfried, 2012. "Are the smart kids more rational?," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/370786, Katholieke Universiteit Leuven.
- Santiago Sanchez-Pages (University of Edinburgh) & Marco Faravelli (School of Economics, University of Queensland, Australia), 2012.
"(Don't) Make My Vote Count,"
ESE Discussion Papers
213, Edinburgh School of Economics, University of Edinburgh.
- Apesteguia, Jose & Ballester, Miguel A., 2013.
"Choice by sequential procedures,"
Games and Economic Behavior,
Elsevier, vol. 77(1), pages 90-99.
- Jose Apesteguia & Miguel A. Ballester, 2012. "Choice by sequential procedures," Economics Working Papers 1309, Department of Economics and Business, Universitat Pompeu Fabra.
- Jose Apesteguia & Miguel Ballester, 2009. "Choice by Sequential Procedures," NajEcon Working Paper Reviews 814577000000000404, www.najecon.org.
- Jose Apesteguia & Miguel Angel Ballester, 2012. "Choice By Sequential Procedures," Working Papers 615, Barcelona Graduate School of Economics.
- Johannes Spinnewijn, 2012. "Heterogeneity, Demand for Insurance and Adverse Selection," CEP Discussion Papers dp1142, Centre for Economic Performance, LSE.
- Jakiela, Pamela & Ozier, Owen, 2012. "Does Africa need a rotten Kin Theorem ? experimental evidence from village economies," Policy Research Working Paper Series 6085, The World Bank.
- Smeulders, Bart & Cherchye, Laurens & De Rock, Bram & Spieksma, Frits, 2012. "Goodness of fit measures for revealed preference tests: complexity results and algorithms," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/359169, Katholieke Universiteit Leuven.
- Mark Dean & Daniel Martin, 2011. "Testing for Rationality with Consumption Data: Demographics and Heterogeneity," Working Papers 2011-11, Brown University, Department of Economics.
- Halevy, Yoram, 2012. "Parametric Recoverability of Preferences," Micro Theory Working Papers yoram_halevy-2012-20, Microeconomics.ca Website, revised 30 Jun 2012.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paper Administrator).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.