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Dissecting The Monty Hall Anomaly

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  • James, Duncan
  • Friedman, Daniel
  • Louie, Christina
  • O'Meara, Taylor

Abstract

We assess competing explanations of irrational behavior in the Monty Hall problem by creating new variants of the problem. Some variants employ a feature that automates the merging of probabilities, thus rendering transparent the probabilistic advantage of the rational choice. That feature also enables systematic variation in informational asymmetry, and in ordering of actions. Data from 77 subjects, each of whom makes 30 binary decisions, indicate that automated merging raises the fraction of rational choices from around 40% to over 80%. Other features examined have much less impact, indicating the importance of a Bayesian updating failure. (JEL C91, D02, D81, D83)
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Suggested Citation

  • James, Duncan & Friedman, Daniel & Louie, Christina & O'Meara, Taylor, 2018. "Dissecting The Monty Hall Anomaly," Santa Cruz Department of Economics, Working Paper Series qt7tp7c0rk, Department of Economics, UC Santa Cruz.
  • Handle: RePEc:cdl:ucscec:qt7tp7c0rk
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    References listed on IDEAS

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    1. Charles N. Noussair & Charles R. Plott & Raymond G. Riezman, 2013. "An Experimental Investigation of the Patterns of International Trade," World Scientific Book Chapters, in: Raymond Riezman (ed.), International Trade Agreements and Political Economy, chapter 17, pages 299-328, World Scientific Publishing Co. Pte. Ltd..
    2. Friedman, Daniel, 1998. "Monty Hall's Three Doors: Construction and Deconstruction of a Choice Anomaly," American Economic Review, American Economic Association, vol. 88(4), pages 933-946, September.
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    4. Heath, Chip, 1995. "Escalation and De-escalation of Commitment in Response to Sunk Costs: The Role of Budgeting in Mental Accounting," Organizational Behavior and Human Decision Processes, Elsevier, vol. 62(1), pages 38-54, April.
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    6. Ignacio Esponda Jr. & Emanuel Vespa Jr., 2014. "Hypothetical Thinking and Information Extraction in the Laboratory," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 180-202, November.
    7. Cox, James C. & Sadiraj, Vjollca & Schnier, Kurt E. & Sweeney, John F., 2016. "Higher quality and lower cost from improving hospital discharge decision making," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PB), pages 1-16.
    8. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
    9. Ignacio Palacios-Huerta, 2003. "Learning to Open Monty Hall's Doors," Experimental Economics, Springer;Economic Science Association, vol. 6(3), pages 235-251, November.
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    Cited by:

    1. Duarte Gonçalves & Jonathan Libgober & Jack Willis, 2021. "Learning versus Unlearning: An Experiment on Retractions," NBER Working Papers 29512, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Economics;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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