IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_11361.html
   My bibliography  Save this paper

Dynamically Optimized Sequential Experimentation (DOSE) for Estimating Economic Preference Parameters

Author

Listed:
  • Jonathan Chapman
  • Erik Snowberg
  • Stephanie W. Wang
  • Colin Camerer

Abstract

We introduce DOSE⸻Dynamically Optimized Sequential Experimentation⸻to elicit preference parameters. DOSE starts with a model of preferences and a prior over the parameters of that model, then dynamically chooses a customized question sequence for each participant according to an experimenter-selected information criterion. After each question, the prior is updated, and the posterior is used to select the next, informationally-optimal, question. Simulations show that DOSE produces parameter estimates that are approximately twice as accurate as those from established elicitation methods. DOSE estimates of individual-level risk and time preferences are also more accurate, more stable over time, and faster to administer in a large representative, incentivized survey of the U.S. population (N = 2; 000). By reducing measurement error, DOSE identifies a stronger relationship between risk aversion and cognitive ability than other elicitation techniques. DOSE thus provides a flexible procedure that facilitates the collection of incentivized preference measures in the field.

Suggested Citation

  • Jonathan Chapman & Erik Snowberg & Stephanie W. Wang & Colin Camerer, 2024. "Dynamically Optimized Sequential Experimentation (DOSE) for Estimating Economic Preference Parameters," CESifo Working Paper Series 11361, CESifo.
    • Handle: RePEc:ces:ceswps:_11361
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp11361.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, May.
    2. Chuang, Yating & Schechter, Laura, 2015. "Stability of experimental and survey measures of risk, time, and social preferences: A review and some new results," Journal of Development Economics, Elsevier, vol. 117(C), pages 151-170.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jetter, Michael & Magnusson, Leandro M. & Roth, Sebastian, 2020. "Becoming sensitive: Males’ risk and time preferences after the 2008 financial crisis," European Economic Review, Elsevier, vol. 128(C).
    2. Jansen, Anika & Pfeifer, Harald & Raecke, Julia, 2017. "Only the brave? Risk and time preferences of decision makers and firms’ investment in worker training," Research Memorandum 004, Maastricht University, Graduate School of Business and Economics (GSBE).
    3. Lönnqvist, Jan-Erik & Verkasalo, Markku & Walkowitz, Gari & Wichardt, Philipp C., 2015. "Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 254-266.
    4. Ubfal, Diego, 2016. "How general are time preferences? Eliciting good-specific discount rates," Journal of Development Economics, Elsevier, vol. 118(C), pages 150-170.
    5. Kuroishi, Yusuke & Sawada, Yasuyuki, 2024. "On the stability of preferences: Experimental evidence from two disasters," European Economic Review, Elsevier, vol. 161(C).
    6. Andreas C. Drichoutis & Rodolfo M. Nayga, 2022. "On the stability of risk and time preferences amid the COVID-19 pandemic," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 759-794, June.
    7. Beine, Michel & Charness, Gary & Dupuy, Arnaud & Joxhe, Majlinda, 2020. "Shaking Things Up: On the Stability of Risk and Time Preferences," IZA Discussion Papers 13084, Institute of Labor Economics (IZA).
    8. Magnusson, Leandro M. & Roth, Sebastian, 2024. "Trust, risk, and gender: Evidence from the Black Saturday Fires in Victoria, Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 223(C), pages 21-39.
    9. Kureishi, Wataru & Paule-Paludkiewicz, Hannah & Tsujiyama, Hitoshi & Wakabayashi, Midori, 2020. "Time preferences over the life cycle," SAFE Working Paper Series 267, Leibniz Institute for Financial Research SAFE, revised 2020.
    10. Miura, Takahiro, 2019. "Does time preference affect smoking behavior? A dynamic panel analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 170-180.
    11. Di Falco, Salvatore & Berck, Peter & Bezabih, Mintewab & Köhlin, Gunnar, 2019. "Rain and impatience: Evidence from rural Ethiopia," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 40-51.
    12. Kureishi, Wataru & Paule-Paludkiewicz, Hannah & Tsujiyama, Hitoshi & Wakabayashi, Midori, 2021. "Time preferences over the life cycle and household saving puzzles," Journal of Monetary Economics, Elsevier, vol. 124(C), pages 123-139.
    13. Zexuan Wang & Ismaël Rafaï & Marc Willinger, 2023. "Does age affect the relation between risk and time preferences? Evidence from a representative sample," Southern Economic Journal, John Wiley & Sons, vol. 90(2), pages 341-368, October.
    14. Giuseppe Albanese & Guido de Blasio & Paolo Sestito, 2017. "Trust, risk and time preferences: evidence from survey data," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(4), pages 367-388, December.
    15. Lindner, Florian & Rose, Julia, 2017. "No need for more time: Intertemporal allocation decisions under time pressure," Journal of Economic Psychology, Elsevier, vol. 60(C), pages 53-70.
    16. Delphine Boutin & Laurène Petifour & Haris Megzari, 2022. "Instability of preferences due to Covid-19 Crisis and emotions: a natural experiment from urban Burkina Faso," Working Papers hal-03623601, HAL.
    17. Luc Meunier & Sima Ohadi, 2021. "The Impact of the COVID-19 Crisis on Individuals' Risk and Time Preferences," Economics Bulletin, AccessEcon, vol. 41(3), pages 1050-1069.
    18. Pushkar Maitra & Ananta Neelim, 2021. "Behavioural characteristics, stability of preferences and entrepreneurial success," Chapters, in: Ananish Chaudhuri (ed.), A Research Agenda for Experimental Economics, chapter 5, pages 93-118, Edward Elgar Publishing.
    19. Kucuk, Merve & Ulubasoglu, Mehmet & Vu, Ha, 2024. "Stormy Futures? The Impact of Climatic Shocks on Retirement Savings," MPRA Paper 121241, University Library of Munich, Germany.
    20. Holden , Stein T. & Tilahun , Mesfin, 2019. "The Devil is in the Details: Risk Preferences, Choice List Design, and Measurement Error," CLTS Working Papers 3/19, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.

    More about this item

    Keywords

    preference elicitation; risk preferences; time preferences; dynamic experiments; cognitive ability; preference stability;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_11361. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.