When Choices are Mistakes (Joint with John Rehbeck)

(Joint seminar with CESS)

Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the canonical axioms and revise their lottery choices to be consistent with them. We interpret this to mean that many axiom violations we observed were mistakes.

Link to paper: kirbyknielsen.com/wp-content/uploads/kirby/Mistakes.pdf

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