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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Paper provided by Department of Economics, University of York in its series Discussion Papers with number
06/22.
Length: Date of creation: Nov 2006 Date of revision:
Jul 2007 Handle: RePEc:yor:yorken:06/22
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Article
John Bone & John Hey & John Suckling, 2009.
"Do people plan?,"
Experimental Economics,
Springer, vol. 12(1), pages 12-25, March.
[Downloadable!] (restricted)
Paper
John Bone & John D Hey & John Suckling, 2007.
"Do People Plan?,"
Discussion Papers
07/31, Department of Economics, University of York.
[Downloadable!]
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.:
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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