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Guessing and gambling

Author

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  • Albert Burgos

    (Universidad de Murcia)

Abstract

Scoring methods in multiple-choice tests are usually designed as fair bets, and thus random guesswork yields zero expected return. This causes the undesired result of forcing risk averse test-takers to pay a premium in the sense of letting unmarked answers for which they have partial but not full knowledge. In this note I use a calibrated model of prospect theory [Tversky and Kahneman (1992, 1995))] to compute a fair rule which is also strategically neutral, (i.e. under partial knowledge answering is beneficial for the representative calibrated agent, while under total uncertainty it is not). This rule is remarkably close to an old rule presented in 1969 by Traub et al. in which there is no penalty for wrong answers but omitted answers are rewarded by 1/M if M is the number of possible answers.

Suggested Citation

  • Albert Burgos, 2004. "Guessing and gambling," Economics Bulletin, AccessEcon, vol. 4(4), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-04d80001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pelin Akyol & James Key & Kala Krishna, 2022. "Hit or Miss? Test Taking Behavior in Multiple Choice Exams," Annals of Economics and Statistics, GENES, issue 147, pages 3-50.
    2. MARÍN MARTÍNEZ, Carmen & ROSA GARCÍA, Alfonso, 2014. "Is Gender Bias A Cost Of Failure Issue?," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(3), pages 19-30.
    3. Pekkarinen, Tuomas, 2015. "Gender differences in behaviour under competitive pressure: Evidence on omission patterns in university entrance examinations," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 94-110.
    4. Hubert Janos Kiss & Adrienn Selei, 2013. "Gambler's fallacy in the classroom?," CERS-IE WORKING PAPERS 1342, Institute of Economics, Centre for Economic and Regional Studies.
    5. Marín, Carmen & Rosa-García, Alfonso, 2011. "Gender bias in risk aversion: evidence from multiple choice exams," MPRA Paper 39987, University Library of Munich, Germany.
    6. Pekkarinen, Tuomas, 2014. "Gender Differences in Strategic Behaviour under Competitive Pressure: Evidence on Omission Patterns in University Entrance Examinations," IZA Discussion Papers 8018, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics

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