IDEAS home Printed from https://ideas.repec.org/p/hce/wpaper/066.html
   My bibliography  Save this paper

Forecasting economic decisions under risk: The predictive importance of choice-process data

Author

Listed:
  • Steffen Q. Mueller

    (Chair for Economic Policy, University of Hamburg)

  • Patrick Ring

    (Social and Behavioral Approaches to Global Problems, Kiel Institute for the World Economy)

  • Maria Schmidt

    (Department of Psychology, Kiel University)

Abstract

We investigate various statistical methods for forecasting risky choices and identify important decision predictors. Subjects (n=44) are presented a series of 50/50 gambles that each involves a potential gain and a potential loss, and subjects can choose to either accept or reject a displayed lottery. From this data, we use information on 8800 individual lottery gambles and specify four predictor-sets that include different combinations of input categories: lottery design, socioeconomic characteristics, past gambling behavior, eye-movements, and various psychophysiological measures that are recorded during the first three seconds of lottery-information processing. The results of our forecasting experiment show that choice-process data can effectively be used to forecast risky gambling decisions; however, we find large differences among models’ forecasting capabilities with respect to subjects, predictor-sets, and lottery payoff structures.

Suggested Citation

  • Steffen Q. Mueller & Patrick Ring & Maria Schmidt, 2019. "Forecasting economic decisions under risk: The predictive importance of choice-process data," Working Papers 066, Chair for Economic Policy, University of Hamburg.
  • Handle: RePEc:hce:wpaper:066
    as

    Download full text from publisher

    File URL: http://www.hced.uni-hamburg.de/WorkingPapers/HCED-066.pdf
    File Function: First Version, 2019
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gabriel Ahlfeldt & Wolfgang Maennig, 2010. "Impact of sports arenas on land values: evidence from Berlin," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 205-227, April.
    2. Arne Feddersen & Wolfgang Maennig, 2009. "Wage and Employment Effects of the Olympic Games in Atlanta 1996 Reconsidered," Working Papers 0916, International Association of Sports Economists;North American Association of Sports Economists.
    3. Arne Feddersen & Wolfgang Maennig, 2005. "Trends in Competitive Balance: Is there Evidence for Growing Imbalance in Professional Sport Leagues?," Working Papers 0012005, Chair for Economic Policy, University of Hamburg.
    4. Wolfgang Maennig, 2017. "Governance in Sports Organizations," Working Papers 060, Chair for Economic Policy, University of Hamburg.
    5. Arne Feddersen & Wolfgang Maennig, 2013. "Mega-Events And Sectoral Employment: The Case Of The 1996 Olympic Games," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 580-603, July.
    6. Gabriel Ahlfeldt, 2007. "If Alonso Was Right: Accessibility as Determinant for Attractiveness of Urban Location," Working Papers 012, Chair for Economic Policy, University of Hamburg.
    7. Wolfgang Maennig, 2012. "London 2012 - das Ende des Mythos vom erfolgreichen Sportsoldaten," Working Papers 044, Chair for Economic Policy, University of Hamburg.
    8. Fischer, Justina AV & Sousa-Poza, Alfonso, 2010. "The impact of institutions on firms’ rejuvenation policies: Early retirement with severance pay versus simple lay-off. A Cross-European Analysis," MPRA Paper 20343, University Library of Munich, Germany.
    9. Wolfgang Maennig & Florian Schwarthoff, 2006. "Stadium Architecture and regional economic development: International experience and the plans of Durban," Working Papers 200604, Chair for Economic Policy, University of Hamburg.
    10. Bjornskov, Christian & Dreher, Axel & Fischer, Justina AV & Schnellenbach, Jan, 2009. "On the relation between income inequality and happiness: Do fairness perceptions matter?," MPRA Paper 19494, University Library of Munich, Germany.
    11. Malte Heyne & Wolfgang Maennig & Bernd Süssmuth, 2007. "Mega-sporting Events as Experience Goods," Working Papers 0706, International Association of Sports Economists;North American Association of Sports Economists.
    12. Falch, Torberg & Fischer, Justina A.V., 2012. "Public sector decentralization and school performance: International evidence," Economics Letters, Elsevier, vol. 114(3), pages 276-279.
    13. Maennig Wolfgang & Stobernack Michael, 2011. "Do men slow down faster than women?," Review of Economics, De Gruyter, vol. 62(3), pages 263-278, December.
    14. Stephanie Jasmand & Wolfgang Maennig, 2007. "Regional Income and Employment Effects of the 1972 Munich Olympic Summer Games," Working Papers 0712, International Association of Sports Economists;North American Association of Sports Economists.
    15. Arne Feddersen & Sven Jacobsen & Wolfgang Maennig, 2009. "Sports Heroes and Mass Sports Participation – The (Double) Paradox of the "German Tennis Boom"," Working Papers 029, Chair for Economic Policy, University of Hamburg.
    16. Steffen Q. Mueller & Patrick Ring & Maria Schmidt, 2019. "Forecasting economic decisions under risk: The predictive importance of choice-process data," Working Papers 066, Chair for Economic Policy, University of Hamburg.
    17. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2017. "Zoning in reunified Berlin," Working Papers 059, Chair for Economic Policy, University of Hamburg.
    18. Wolfgang Maennig & Marcel Porsche, 2008. "The Feel-good Effect at Mega Sports Events. Recommendations for Public and Private Administration Informed by the Experience of the FIFA World Cup 2006," Working Papers 0817, International Association of Sports Economists;North American Association of Sports Economists.
    19. Wolfgang Maennig, 2011. "Monument Protection and Zoning in Germany: Regulations and Public Support from an International Perspective," Working Papers 040, Chair for Economic Policy, University of Hamburg.
    20. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2013. "Urban Renewal after the Berlin Wall," Working Papers 049, Chair for Economic Policy, University of Hamburg.
    21. Gabriel Ahlfeldt & Wolfgang Maennig, 2008. "Monument Protection: Internal and External Price Effects," Working Papers 017, Chair for Economic Policy, University of Hamburg.
    22. Wolfgang Maennig & Felix Richter, 2012. "Exports and Olympic Games," Journal of Sports Economics, , vol. 13(6), pages 635-641, December.
    23. Paul André, 2014. "A New Team," Accounting in Europe, Taylor & Francis Journals, vol. 11(1), pages 1-3, June.
    24. Maennig, Wolfgang & Ahlfeldt, Gabriel M. & Steenbeck, Malte, 2016. "Après nous le déluge? Direct democracy and intergenerational conflicts in aging societies," VfS Annual Conference 2016 (Augsburg): Demographic Change 145793, Verein für Socialpolitik / German Economic Association.
    25. Wolfgang Maennig & Christopher Vierhaus, 2015. "Who Wins Olympic Bids?," Working Papers 050, Chair for Economic Policy, University of Hamburg.
    26. Bischoff, Oliver, 2012. "Explaining regional variation in equilibrium real estate prices and income," Journal of Housing Economics, Elsevier, vol. 21(1), pages 1-15.
    27. Steffen Q. Mueller, 2020. "Pre- and within-season attendance forecasting in Major League Baseball: a random forest approach," Applied Economics, Taylor & Francis Journals, vol. 52(41), pages 4512-4528, September.
    28. Sebastian Brandt & Wolfgang Maennig & Felix Richter, 2013. "Do places of worship affect housing prices? Evidence from Germany," Working Papers 048, Chair for Economic Policy, University of Hamburg.
    29. Stan Du Plessis & Wolfgang Maennig, 2010. "The 2010 World Cup High-Frequency Data Economics: Effects on International Awareness and (Self-Defeating) Tourism," Working Papers 037, Chair for Economic Policy, University of Hamburg.
    30. Wolfgang Maennig & Christian Wellbrock, 2016. "Rio 2016: Sozioökonomische Projektion des Olympischen Medaillenranking," Working Papers 056, Chair for Economic Policy, University of Hamburg.
    31. Gabriel Ahlfeldt, 2008. "The Train has Left the Station: Real Estate Price Effects of Mainline Realignment in Berlin," Working Papers 019, Chair for Economic Policy, University of Hamburg.
    32. Viktoria C. E. Langer & Wolfgang Maennig & Felix J. Richter, 2015. "News shocks in the data: Olympic Games and their macroeconomic effects – Reply," Working Papers 052, Chair for Economic Policy, University of Hamburg.
    33. Gabriel Ahlfeldt & Nicolai Wendeland, 2008. "Fifty Years of Urban Accessibility: The Impact of Urban Railway Network on the Land Gradient in Industrializing Berlin," KOF Working papers 08-208, KOF Swiss Economic Institute, ETH Zurich.
    34. Felix Richter & Malte Steenbeck & Markus Wilhelm, 2013. "Nuclear Accidents and Policy: Notes on Public Perception," SOEPpapers on Multidisciplinary Panel Data Research 590, DIW Berlin, The German Socio-Economic Panel (SOEP).
    35. Gabriel Ahlfeldt & Wolfgang Maennig & Michaela Ölschläger, 2009. "Lifestyles and Preferences for (Public) Goods: Professional Football in Munich," Working Papers 030, Chair for Economic Policy, University of Hamburg.
    36. Ahlfeldt Gabriel M. & Maennig Wolfgang, 2010. "Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(5), pages 506-521, October.
    37. Helmut Grothe & Wolfgang Maennig, 2017. "A 100-million-dollar fine for Russia's doping policy? A billion-dollar penalty would be more correct! Millionenstrafe für Russlands Doping-Politik? Eine Milliarden-Strafe wäre richtiger!," Working Papers 063, Chair for Economic Policy, University of Hamburg.
    38. Stan du Plessis & Wolfgang Maennig, 2007. "World Cup 2010: South African Economic Perspectives and Perspectives Policy Challenges Informed by the Experience of Germany 2006," Working Papers 004, Chair for Economic Policy, University of Hamburg.
    39. Gabriel Ahlfeldt & Wolfgang Maennig & Tobias Osterheider, 2009. "Regional and Sectoral Effects of a Common Monetary Policy: Evidence from Euro Referenda in Denmark and Sweden," Working Papers 028, Chair for Economic Policy, University of Hamburg.
    40. Gabriel Ahlfeldt, 2010. "Blessing or Curse? Appreciation, Amenities and Resistance around the Berlin "Mediaspree"," Working Papers 032, Chair for Economic Policy, University of Hamburg.
    41. Wright, Marvin N. & Ziegler, Andreas, 2017. "ranger: A Fast Implementation of Random Forests for High Dimensional Data in C++ and R," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 77(i01).
    42. WOLFGANG MAENNIG & STAN Du PLESSIS, 2007. "World Cup 2010: South African Economic Perspectives And Policy Challenges Informed By The Experience Of Germany 2006," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 578-590, October.
    43. Gabriel Ahlfeldt & Wolfgang Maennig, 2007. "Assessing External Effects of City Airports: Land Values in Berlin," Working Papers 011, Chair for Economic Policy, University of Hamburg.
    44. Wolfgang Maennig & Markus Wilhelm, 2011. "Becoming (Un)employed and Life Satisfaction: Asymmetric Effects and Potential Omitted Variable Bias in Empirical Happiness Studies," Working Papers 041, Chair for Economic Policy, University of Hamburg.
    45. Wolfgang Maennig & Christian Wellbrock, 2012. "London 2012 - Medal Projection - Medaillenvorausberechnung," Working Papers 043, Chair for Economic Policy, University of Hamburg.
    46. Lisa Dust & Wolfgang Maennig, 2007. "Shrinking and Growing Metropolitan Areas - Asymmetric Real Estate Price Reactions?," Working Papers 006, Chair for Economic Policy, University of Hamburg.
    47. Arne Feddersen, 2006. "Economic Consequences of the UEFA Champions League for National Championships - The Case of Germany," Working Papers 0012006, Chair for Economic Policy, University of Hamburg.
    48. W. Maennig & M. Steenbeck & M. Wilhelm, 2014. "Rhythms and cycles in happiness," Applied Economics, Taylor & Francis Journals, vol. 46(1), pages 70-78, January.
    49. Franziska K. Kruse & Wolfgang Maennig, 2017. "The future development of world records," Working Papers 061, Chair for Economic Policy, University of Hamburg.
    50. Viktoria C. E. Langer, 2015. "Good news about news shocks," Working Papers 053, Chair for Economic Policy, University of Hamburg.
    51. Gabriel Ahlfeldt, 2007. "A New Central Station for a Unified City: Predicting Impact on Property Prices for Urban Railway Network Extensions in Berlin," Working Papers 013, Chair for Economic Policy, University of Hamburg.
    52. Thêmis Aragão & Wolfgang Maennig, 2013. "Mega Sporting Events, Real Estate, and Urban Social Economics – The Case of Brazil 2014/2016," Working Papers 047, Chair for Economic Policy, University of Hamburg.
    53. Wolfgang Maennig, 2015. "Ensuring good governance and preventing corruption in the planning of major sporting events – open issues," Working Papers 051, Chair for Economic Policy, University of Hamburg.
    54. Wolfgang Maennig, 2017. "Major Sports Events: Economic Impact," Working Papers 058, Chair for Economic Policy, University of Hamburg.
    55. Wolfgang Maennig & Christopher Vierhaus, 2016. "Which countries bid for the Olympic Games? Economic, political, and social factors and chances of winning," Working Papers 055, Chair for Economic Policy, University of Hamburg.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wolfgang Maennig & Stefan Wilhelm, 2022. "News and Noise in Crime Politics: The Role of Announcements and Risk Attitudes," Working Papers 072, Chair for Economic Policy, University of Hamburg.
    2. Steffen Q. Mueller & Patrick Ring & Maria Schmidt, 2019. "Forecasting economic decisions under risk: The predictive importance of choice-process data," Working Papers 066, Chair for Economic Policy, University of Hamburg.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steffen Q. Mueller, 2020. "Pre- and within-season attendance forecasting in Major League Baseball: a random forest approach," Applied Economics, Taylor & Francis Journals, vol. 52(41), pages 4512-4528, September.
    2. Franziska K. Kruse & Wolfgang Maennig, 2019. "Yellow Cards and Suspension by Choice: Determinants and Asymmetries," Working Papers 064, Chair for Economic Policy, University of Hamburg.
    3. Franziska K. Kruse & Wolfgang Maennig, 2017. "The future development of world records," Working Papers 061, Chair for Economic Policy, University of Hamburg.
    4. Wolfgang Maennig, 2017. "Governance in Sports Organizations," Working Papers 060, Chair for Economic Policy, University of Hamburg.
    5. Wolfgang Maennig, 2017. "Major Sports Events: Economic Impact," Working Papers 058, Chair for Economic Policy, University of Hamburg.
    6. Wolfgang Maennig, 2017. "Public Referenda and Public Opinion on Olympic Games," Working Papers 057, Chair for Economic Policy, University of Hamburg.
    7. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2017. "Zoning in reunified Berlin," Working Papers 059, Chair for Economic Policy, University of Hamburg.
    8. Wolfgang Maennig & Stefan Wilhelm, 2022. "News and Noise in Crime Politics: The Role of Announcements and Risk Attitudes," Working Papers 072, Chair for Economic Policy, University of Hamburg.
    9. Justina A.V. Fischer & Alfonso Sousa-Poza, 2010. "The Impact of Institutions on Firms’ Rejuvenation Policies: Early Retirement with Severance Pay versus Simple Lay-Off. A Cross-European Analysis," Working Papers 034, Chair for Economic Policy, University of Hamburg.
    10. Falch, Torberg & Fischer, Justina A.V., 2012. "Public sector decentralization and school performance: International evidence," Economics Letters, Elsevier, vol. 114(3), pages 276-279.
    11. Douglas Barrios & Stuart Russell & Matt Andrews, 2016. "Bringing Home the Gold? A Review of the Economic Impact of Hosting Mega-Events," CID Working Papers 320, Center for International Development at Harvard University.
    12. M.R. van den Berg & M. de Nooij, 2013. "The bidding paradox: why economists, consultants and politicians disagree on the economic effects of mega sports events but might agree on their attractiveness," Working Papers 13-08, Utrecht School of Economics.
    13. Maennig, Wolfgang & Ahlfeldt, Gabriel M. & Steenbeck, Malte, 2016. "Après nous le déluge? Direct democracy and intergenerational conflicts in aging societies," VfS Annual Conference 2016 (Augsburg): Demographic Change 145793, Verein für Socialpolitik / German Economic Association.
    14. Gabriel M. AHLFELDT & Arne FEDDERSEN, 2010. "Geography Of A Sports Metropolis," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 11-36.
    15. Arne Feddersen & Wolfgang Maennig, 2013. "Mega-Events And Sectoral Employment: The Case Of The 1996 Olympic Games," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 580-603, July.
    16. Viktoria C. E. Langer, 2015. "Good news about news shocks," Working Papers 053, Chair for Economic Policy, University of Hamburg.
    17. Fourie, Johan & Santana-Gallego, María, 2011. "The impact of mega-sport events on tourist arrivals," Tourism Management, Elsevier, vol. 32(6), pages 1364-1370.
    18. Wolfgang Maennig, 2012. "London 2012 - das Ende des Mythos vom erfolgreichen Sportsoldaten," Working Papers 044, Chair for Economic Policy, University of Hamburg.
    19. Stan du Plessis & Wolfgang Maennig, 2012. "The 2010 FIFA World Cup High-frequency Data Economics: Effects on International Tourism and Awareness for South Africa," Chapters, in: Wolfgang Maennig & Andrew Zimbalist (ed.), International Handbook on the Economics of Mega Sporting Events, chapter 27, Edward Elgar Publishing.
    20. Wolfgang Maennig & Felix Richter, 2012. "Exports and Olympic Games," Journal of Sports Economics, , vol. 13(6), pages 635-641, December.

    More about this item

    Keywords

    Forecasting; lottery; risk; choice-process tracing; experiments; machine learning; decision theory;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hce:wpaper:066. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ihhamde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wolfgang Maennig (email available below). General contact details of provider: https://edirc.repec.org/data/ihhamde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.