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Title:Empirical Tests of Intransitivity Predicted by Models of Risky Choice PDF Logo
Authors:Birnbaum, Michael H.
Schmidt, Ulrich
Issue Date:2006
Series/Report no.:Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2006,10
Abstract:Recently proposed models of risky choice imply systematic violations of transitivity of preference. Five studies explored whether people show patterns of intransitivity predicted by four descriptive models. To distinguish ?true? violations from those produced by ?error,? a model was fit in which each choice can have a different error rate and each person can have a different pattern of true preferences that need not be transitive. Error rate for a choice is estimated from preference reversals between repeated presentations of the same choice. Results of five studies showed that very few people repeated intransitive patterns. We can retain the hypothesis that transitivity best describes the data of the vast majority of participants.
Subjects:decision making
errors
gambling effect
reference points
regret
transitivity
JEL:C91
D81
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Economics Working Papers, Department of Economics, CAU Kiel

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