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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," NBER Working Papers 33013, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33013
    Note: DEV POL
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    More about this item

    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
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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