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The Impact of Learning by Thought on Violations of Independence and Coalescing

Author

Listed:
  • Michael H. Birnbaum

    (Department of Psychology, California State University, Fullerton, Fullerton, California 92831)

  • Ulrich Schmidt

    (Department of Economics, University of Kiel, Olshausenstr. 40, 24098 Kiel, Germany; Kiel Institute for the World Economy, Kiel, Germany; and Department of Economics and Econometrics, University of Johannesburg, South Africa)

Abstract

This paper reports results from a repeated experiment on decision making under risk where subjects must address the same choice problems in several rounds. We investigate how behavior changes in the course of the experiment. The design focuses on choice problems allowing for direct tests of independence and coalescing. We show that inconsistencies in responses as well as violations of independence and coalescing decrease from earlier to later rounds. Our results provide evidence in favor of expected utility in conjunction with the discovered preference hypothesis.

Suggested Citation

  • Michael H. Birnbaum & Ulrich Schmidt, 2015. "The Impact of Learning by Thought on Violations of Independence and Coalescing," Decision Analysis, INFORMS, vol. 12(3), pages 144-152.
    • Handle: RePEc:inm:ordeca:v:12:y:2015:i:3:p:144-152
    DOI: 10.1287/deca.2015.0316
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mark Schneider & Jonathan W. Leland & Nathaniel T. Wilcox, 2018. "Ambiguity framed," Journal of Risk and Uncertainty, Springer, vol. 57(2), pages 133-151, October.
      • Mark Schneider & Jonathan Leland & Nathaniel T. Wilcox, 2016. "Ambiguity Framed," Working Papers 16-11, Chapman University, Economic Science Institute.
    2. Jonathan W. Leland & Mark Schneider & Nathaniel T. Wilcox, 2019. "Minimal Frames and Transparent Frames for Risk, Time, and Uncertainty," Management Science, INFORMS, vol. 65(9), pages 4318-4335, September.
    3. Zachary Breig & Paul Feldman, 2024. "Revealing risky mistakes through revisions," Journal of Risk and Uncertainty, Springer, vol. 68(3), pages 227-254, June.
    4. Thomas Dohmen & Georgios Gerasimou, 2024. "Learning to Maximize (Expected) Utility," Papers 2402.16538, arXiv.org, revised Dec 2024.
    5. Daniel J. Benjamin & Mark Alan Fontana & Miles Kimball, 2020. "Reconsidering Risk Aversion," GRU Working Paper Series GRU_2020_026, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    6. Pavlo Blavatskyy & Valentyn Panchenko & Andreas Ortmann, 2023. "How common is the common-ratio effect?," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 253-272, April.
    7. Andreas Glöckner & Baiba Renerte & Ulrich Schmidt, 2020. "Violations of coalescing in parametric utility measurement," Theory and Decision, Springer, vol. 89(4), pages 471-501, November.
    8. Jonathan W. Leland & Mark Schneider, 2016. "Salience, Framing, and Decisions under Risk, Uncertainty, and Time," Working Papers 16-08, Chapman University, Economic Science Institute.
    9. Walter, Johannes & Biermann, Jan & Horton, John, 2024. "Advised by an Algorithm: Learning with Different Informational Resources," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302407, Verein für Socialpolitik / German Economic Association.
    10. Andrea C. Hupman & Jay Simon, 2023. "The Legacy of Peter Fishburn: Foundational Work and Lasting Impact," Decision Analysis, INFORMS, vol. 20(1), pages 1-15, March.
    11. Nathaniel T. Wilcox, 2017. "Random expected utility and certainty equivalents: mimicry of probability weighting functions," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(2), pages 161-173, December.
    12. Michael H. Birnbaum & Ulrich Schmidt & Miriam D. Schneider, 2017. "Testing independence conditions in the presence of errors and splitting effects," Journal of Risk and Uncertainty, Springer, vol. 54(1), pages 61-85, February.

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