When Choices are Mistakes

70 Pages Posted: 18 Nov 2019 Last revised: 5 Dec 2020

See all articles by Kirby Nielsen

Kirby Nielsen

California Institute of Technology

John Rehbeck

Ohio State University (OSU) - Economics

Date Written: September 25, 2020

Abstract

Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the canonical axioms and revise their lottery choices to be consistent with them. We interpret this to mean that many axiom violations we observed were mistakes.

Keywords: mistakes; rationality; normative versus descriptive theory; procedural decision making

JEL Classification: C90, D01, D60, D80

Suggested Citation

Nielsen, Kirby and Rehbeck, John, When Choices are Mistakes (September 25, 2020). Available at SSRN: https://ssrn.com/abstract=3481381 or http://dx.doi.org/10.2139/ssrn.3481381

Kirby Nielsen

California Institute of Technology ( email )

Pasadena, CA 91125
United States

John Rehbeck (Contact Author)

Ohio State University (OSU) - Economics ( email )

410 Arps Hall
1945 N. High St.
Columbus, OH 43210-1172
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
266
Abstract Views
1,203
Rank
209,128
PlumX Metrics