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Measuring decision confidence

Author

Listed:
  • Sara Arts

    (Radboud University)

  • Qiyan Ong

    (Radboud University)

  • Jianying Qiu

    (Radboud University)

Abstract

We examine whether the way individuals randomize between options captures their decision confidence. In two experiments in which subjects faced pairs of options (a lottery and a varying sure payment), we allowed subjects to choose randomization probabilities according to which they would receive each option. Separately, we obtained two measures of self-reported confidence - confidence statements and probabilistic confidence - for choosing between the two options. Consistent with the predictions of two theoretical frameworks incorporating preference uncertainty, the randomization probabilities correlated strongly with both self-reported measures (median Spearman correlations between 0.86 to 0.89) and corresponded in absolute levels to probabilistic confidence. This relationship is robust to two exogenous manipulations of decision confidence, where we varied the complexity of the lottery and subjects’ experience with the lottery.

Suggested Citation

  • Sara Arts & Qiyan Ong & Jianying Qiu, 2024. "Measuring decision confidence," Experimental Economics, Springer;Economic Science Association, vol. 27(3), pages 582-603, July.
    • Handle: RePEc:kap:expeco:v:27:y:2024:i:3:d:10.1007_s10683-024-09837-x
    DOI: 10.1007/s10683-024-09837-x
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    More about this item

    Keywords

    Decision confidence; Randomization; Incentivized approach; Preference uncertainty;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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