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Testing for the Presence of a Tremble in Economic Experiments

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  • Peter Moffatt

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  • Simon Peters

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Abstract

The classical trinity of tests is used to check for the presence of a tremble in economic experiments in which the response variable is binary. A tremble is said to occur when an agent makes a decision completely at random, without regard to the values taken by the explanatory variables. The properties of the tests are discussed, and an extension of the methodology is used to test for the presence of a tremble in binary panel data from a well-known economic experiment. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Peter Moffatt & Simon Peters, 2001. "Testing for the Presence of a Tremble in Economic Experiments," Experimental Economics, Springer;Economic Science Association, vol. 4(3), pages 221-228, December.
  • Handle: RePEc:kap:expeco:v:4:y:2001:i:3:p:221-228
    DOI: 10.1023/A:1013265203635
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    References listed on IDEAS

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    Cited by:

    1. Andersson, Ola & Tyran, Jean-Robert & Wengström, Erik & Holm, Håkan J., 2013. "Risk Aversion Relates to Cognitive Ability: Fact or Fiction?," Working Paper Series 964, Research Institute of Industrial Economics.
    2. Peter Moffatt, 2005. "Stochastic Choice and the Allocation of Cognitive Effort," Experimental Economics, Springer;Economic Science Association, vol. 8(4), pages 369-388, December.
    3. John Hey & Gianna Lotito, 2009. "Naive, resolute or sophisticated? A study of dynamic decision making," Journal of Risk and Uncertainty, Springer, vol. 38(1), pages 1-25, February.
    4. Anna Conte & M. Levati, 2014. "Use of data on planned contributions and stated beliefs in the measurement of social preferences," Theory and Decision, Springer, vol. 76(2), pages 201-223, February.
    5. Anna Conte & M. Vittoria Levati & Natalia Montinari, 2014. "Experience in Public Goods Experiments," Jena Economic Research Papers 2014-010, Friedrich-Schiller-University Jena.
    6. Anna Conte & John Hey, 2013. "Assessing multiple prior models of behaviour under ambiguity," Journal of Risk and Uncertainty, Springer, vol. 46(2), pages 113-132, April.
    7. Anna Conte & Peter G. Moffatt & Fabrizio Botti & Daniela T. Di Cagno & Carlo D’Ippoliti, 2012. "A test of the rational expectations hypothesis using data from a natural experiment," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4661-4678, December.
    8. Wilcox, Nathaniel T., 2011. "'Stochastically more risk averse:' A contextual theory of stochastic discrete choice under risk," Journal of Econometrics, Elsevier, vol. 162(1), pages 89-104, May.
    9. Nicholas Bardsley & Peter Moffatt, 2007. "The Experimetrics of Public Goods: Inferring Motivations from Contributions," Theory and Decision, Springer, vol. 62(2), pages 161-193, March.
    10. Guido Baltussen & G. Post & Martijn Assem & Peter Wakker, 2012. "Random incentive systems in a dynamic choice experiment," Experimental Economics, Springer;Economic Science Association, vol. 15(3), pages 418-443, September.
    11. Botti, Fabrizio & Conte, Anna & Di Cagno, Daniela & D'Ippoliti, Carlo, 2009. "Lab and framed lab versus natural experiments: Evidence from a risky choice experiment," Research in Economics, Elsevier, vol. 63(4), pages 282-295, December.
    12. Rivas, Javier, 2015. "Mechanism design and bounded rationality: The case of type misreporting," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 6-13.
    13. Vegard Iversen & Cecile Jackson & Bereket Kebede & Alistair Munro & Arjan Verschoor, 2006. "What's love got to do with it? An experimental test of household models in east uganda," Artefactual Field Experiments 00071, The Field Experiments Website.
    14. Christoph Engel & Peter G. Moffat, 2012. "Estimation of the House Money Effect Using Hurdle Models," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_13, Max Planck Institute for Research on Collective Goods.
    15. Navarro-Martinez, Daniel & Loomes, Graham & Isoni, Andrea & Butler, David & Alaoui, Larbi, 2017. "Boundedly Rational Expected Utility Theory," MPRA Paper 79893, University Library of Munich, Germany.
    16. Conte, Anna & Hey, John D. & Moffatt, Peter G., 2011. "Mixture models of choice under risk," Journal of Econometrics, Elsevier, vol. 162(1), pages 79-88, May.
    17. Botti Fabrizio & Conte Anna & Di Cagno Daniela Teresa & D'Ippoliti Carlo, 2008. "Risk Attitude in Real Decision Problems," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-32, March.
    18. John Hey & Gianna Lotito & Anna Maffioletti, 2010. "The descriptive and predictive adequacy of theories of decision making under uncertainty/ambiguity," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 81-111, October.
    19. Iversen, Vegard & Jackson, Cecile & Kebede, Bereket & Munro, Alistair & Verschoor, Arjan, 2011. "Do Spouses Realise Cooperative Gains? Experimental Evidence from Rural Uganda," World Development, Elsevier, vol. 39(4), pages 569-578, April.
    20. Jakusch, Sven Thorsten, 2016. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.

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