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Does Repetition Improve Consistency?

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  • John Hey

Abstract

Much experimental effort has been expended in attempts to establish the relative superiority of Expected Utility theory and the many recently-developed alternatives as descriptions of the behaviour of subjects in risky choice decision problems. The cumulative evidence shows clearly that there is a great deal of noise in the experimental data, which makes it difficult to identify the ‘best’ description of such behaviour. This paper reports on an experiment which seeks to determine whether such noise is relatively transitory and decays with experience and repetition, and thus whether a clearly ‘best’ theory emerges as a result of such repetition. We find that for some subjects this does indeed appear to be the case, while for other subjects the noise remains high and the identification of the underlying preference function remains difficult. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • John Hey, 2001. "Does Repetition Improve Consistency?," Experimental Economics, Springer;Economic Science Association, vol. 4(1), pages 5-54, June.
    • Handle: RePEc:kap:expeco:v:4:y:2001:i:1:p:5-54
    DOI: 10.1023/A:1011486405114
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    References listed on IDEAS

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    1. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    2. Harless, David W & Camerer, Colin F, 1994. "The Predictive Utility of Generalized Expected Utility Theories," Econometrica, Econometric Society, vol. 62(6), pages 1251-1289, November.
    3. Carbone, Enrica, 1997. "Investigation of stochastic preference theory using experimental data," Economics Letters, Elsevier, vol. 57(3), pages 305-311, December.
    4. Machina, Mark J, 1982. ""Expected Utility" Analysis without the Independence Axiom," Econometrica, Econometric Society, vol. 50(2), pages 277-323, March.
    5. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer;Economic Science Association, vol. 1(2), pages 115-131, September.
    6. Karni, Edi & Safra, Zvi, 1987. ""Preference Reversal' and the Observability of Preferences by Experimental Methods," Econometrica, Econometric Society, vol. 55(3), pages 675-685, May.
    7. Holt, Charles A, 1986. "Preference Reversals and the Independence Axiom," American Economic Review, American Economic Association, vol. 76(3), pages 508-515, June.
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    More about this item

    Keywords

    expected utility; non-expected utility; decision under risk; repetition; errors;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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