Ulric B. and Evelyn L. Bray Social Sciences Seminar

Abstract: We empirically investigate the consideration and choice behaviors of individuals under uncertainty. Our experiment elicits these functions by repeatedly questioning the decision makers in a rich lottery domain and, hence, allows them to reveal their stochastic or deterministic consideration and choice. The subjects consider more options on larger menus. 93% of the decision-makers have stochastic considerations on at least one menu and the randomization is more frequent when similar options are jointly presented. Most subjects' consideration data violate monotonicity (Cattaneo et al., 2020.) About 24% have (almost) deterministic choice behavior and they are all consistent with the Weak Axiom of Revealed Preferences. Our tests for stochastic choice properties provide limited support for Regularity, but the majority satisfies Weak Binary Regularity, Strong Stochastic Transitivity, and Independence (Filiz-Ozbay and Masatlioglu, 2023, Gul et al., 2014.)

Written with Keaton Ellis, Emel Filiz-Ozbay.