David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Journal of Economic Methodology 8 (3):385-414 (2001)
The discovered preference hypothesis appears to insulate expected utility theory (EU) from disconfirming experimental evidence. It asserts that individuals have coherent underlying preferences, which experiments may not reveal unless subjects have adequate opportunities and incentives to discover which actions best satisfy their preferences. We identify the confounding effects to be expected in experiments, were that hypothesis true, and consider how they might be controlled for. We argue for a design in which each subject faces just one distinct choice task for real. We review the results of some tests of EU which have used this design. These tests reveal the same violations of the independence axiom as other studies have found. We conclude that the discovered preference hypothesis does not justify scepticism about the reality of these effects.
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References found in this work BETA
Leonard J. Savage (1954). The Foundations of Statistics. Wiley Publications in Statistics.
Citations of this work BETA
Adam S. Booij, Bernard M. S. Van Praag & Gijs van de Kuilen (2010). A Parametric Analysis of Prospect Theory's Functionals for the General Population. Theory and Decision 68 (1-2):115-148.
Robin Cubitt (2005). Experiments and the Domain of Economic Theory. Journal of Economic Methodology 12 (2):197-210.
Francesco Guala (2005). Economics in the Lab: Completeness Vs. Testability. Journal of Economic Methodology 12 (2):185-196.
Robin Cubitt, Maria Ruiz-Martos & Chris Starmer (2012). Are Bygones Bygones? Theory and Decision 73 (2):185-202.
Gijs van de Kuilen (2009). Subjective Probability Weighting and the Discovered Preference Hypothesis. Theory and Decision 67 (1):1-22.
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