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An Economist’s Perspective on Probability Matching

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  • Nir Vulkan

Abstract

The experimental phenomenon known as ‘probability matching’ is often offered as evidence in support of adaptive learning models and against the idea that people maximise their expected utility. Recent interest in dynamic‐based equilibrium theories means the term re‐appears in Economics. However, there seems to be conflicting views on what is actually meant by the term and about the validity of the data. The purpose of this paper is therefore threefold: First, to introduce today’s readers to what is meant by probability matching, and in particular to clarify which aspects of this phenomenon challenge the utility‐maximisation hypothesis. Second, to familiarise the reader with the different theoretical approaches to behaviour in such circumstances, and to focus on the differences in predictions between these theories in light of recent advances. Third, to provide a comprehensive survey of repeated, binary choice experiments.

Suggested Citation

  • Nir Vulkan, 2000. "An Economist’s Perspective on Probability Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 101-118, February.
    • Handle: RePEc:bla:jecsur:v:14:y:2000:i:1:p:101-118
    DOI: 10.1111/1467-6419.00106
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    Cited by:

    1. Bomin Jiang & Daniel Rigobon & Roberto Rigobon, 2022. "From Just-in-Time, to Just-in-Case, to Just-in-Worst-Case: Simple Models of a Global Supply Chain under Uncertain Aggregate Shocks," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 70(1), pages 141-184, March.
    2. Bar-Eli, Michael & Azar, Ofer H. & Ritov, Ilana & Keidar-Levin, Yael & Schein, Galit, 2007. "Action bias among elite soccer goalkeepers: The case of penalty kicks," Journal of Economic Psychology, Elsevier, vol. 28(5), pages 606-621, October.
    3. Gärtner, Florian & Semmler, Darwin & Bannier, Christina E., 2023. "What could possibly go wrong? Predictable misallocation in simple debt repayment experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 28-43.
    4. Qi, Tianxiao & Xu, Bin & Wu, Jinshan & Vriend, Nicolaas J., 2022. "On the Stochasticity of Ultimatum Games," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 227-254.
    5. Beggs, Alan, 2021. "Games with second-order expected utility," Games and Economic Behavior, Elsevier, vol. 130(C), pages 569-590.
    6. Despoina Alempaki & Valeria Burdea & Daniel Read, 2021. "Deceptive Communication: Direct Lies vs. Ignorance, Partial-Truth and Silence," CESifo Working Paper Series 9286, CESifo.
    7. Ido Kallir & Doron Sonsino, 2009. "The Neglect of Correlation in Allocation Decisions," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 1045-1066, April.
    8. Kim, Duk Gyoo & Kim, Hee Chun, 2022. "Probability matching and strategic decision making," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 98(C).
    9. Philip Brookins & Jennifer Brown & Dmitry Ryvkin, 2024. "Evidence gathering under competitive and noncompetitive rewards," Papers 2409.06248, arXiv.org.

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