EconStor >
Forschungsinstitut zur Zukunft der Arbeit (IZA), Bonn >
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/58517
  
Title:Why do people pay for useless advice? Implications of gambler's and hot-hand fallacies in false-expert setting PDF Logo
Authors:Powdthavee, Nattavudh
Riyanto, Yohanes E.
Issue Date:2012
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6557
Abstract:We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent with the theoretical predictions made by Rabin (2002) and Rabin and Vayanos (2010), we show empirically that the answer is yes and that the size of the error made systematically by people is large.
Subjects:gambler's fallacy
hot-hand
random streak
expertise
information
JEL:C91
D03
Persistent Identifier of the first edition:urn:nbn:de:101:1-201301212288
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

Files in This Item:
File Description SizeFormat
716019329.pdf496 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/58517

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.