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Does Consistency Predict Accuracy of Beliefs?: Economists Surveyed About PSA

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  • Nathan Berg

    ()

    (Department of Economics, University of Otago, New Zealand)

  • G. Biele
  • Gerd Gigerenzer

Abstract

When economists' subjective beliefs about the sensitivity and positive predictive value of the Prostate Specific Antigen (PSA) test are internally consistent (i.e., satisfying Bayes' Rule), their beliefs about prostate cancer risk are less accurate than among those with inconsistent beliefs. Using a loss function framework, we investigate but cannot find evidence that inconsistent beliefs lead to inaccuracy, different PSA decisions, or economic losses. Economists' PSA decisions appear to depend much more on the advice of doctors and family members than on beliefs about cancer risks and the pros/cons of PSA testing, which have little to no joint explanatory power.

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Paper provided by University of Otago, Department of Economics in its series Working Papers with number 1308.

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Length: 40 pages
Date of creation: Apr 2013
Date of revision: Apr 2013
Handle: RePEc:otg:wpaper:1308
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Find related papers by JEL classification:
  • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
  • D6 - Microeconomics - - Welfare Economics
  • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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Cited by:

  1. Binder, Martin & Lades, Leonhard, 2014. "Autonomy-enhancing paternalism," Stirling Economics Discussion Papers 2014-09, University of Stirling, Division of Economics.
  2. Berg, Nathan, 2010. "Success from Satisficing and Imitation: Entrepreneurs’ Location Choice and Implications of Heuristics for Local Economic Development," MPRA Paper 26594, University Library of Munich, Germany.

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