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Are preferences complete? An experimental measurement of indecisiveness under risk

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  • Eric Danan
  • Anthony Ziegelmeyer

Abstract

We propose an experimental design allowing a behavioral test of the axiom of completeness of individual preferences. The central feature of our design consists in enabling subjects to postpone commitment at a small cost. Our main result is that preferences are significantly incomplete. We use lotteries as choice alternatives and we find that risk aversion is globally robust to preference incompleteness.

Suggested Citation

  • Eric Danan & Anthony Ziegelmeyer, 2006. "Are preferences complete? An experimental measurement of indecisiveness under risk," Papers on Strategic Interaction 2006-01, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2006-01
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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2006-01.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Incomplete preferences; preference for flexibility; risk aversion; indecisiveness; indifference;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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