The gradual nature of economic errors

Alós–Ferrer, Carlos; Garagnani, Michele

doi:10.1016/j.jebo.2022.05.015

Cited by 10 publications

(2 citation statements)

References 45 publications

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“…All decisions are embedded within a fixed, naturalistic environment using betting decisions (as, e.g., Mosteller & Nogee, 1951;Alós-Ferrer & Garagnani, 2021), and, in addition, the decision task allows us to disentangle numerical differences from economic incentives, which would not be possible using, e.g., a lottery choice task (because in the latter every change in each numerical magnitude influences payoffs). Further, in order to concentrate on the effects of strength of preference, we again strive to streamline the choice environment to reduce possible additional sources of variability in choice frequencies.…”

Section: Design and Proceduresmentioning

confidence: 99%

Strength of preference and decisions under risk

Alós–Ferrer

Garagnani

2022

J Risk Uncertain

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Influential economic approaches as random utility models assume a monotonic relation between choice frequencies and “strength of preference,” in line with widespread evidence from the cognitive sciences, which also document an inverse relation to response times. However, for economic decisions under risk, these effects are largely untested, because models used to fit data assume them. Further, the dimension underlying strength of preference remains unclear in economics, with candidates including payoff-irrelevant numerical magnitudes. We provide a systematic, out-of-sample empirical validation of these relations (both for choices and response times) relying on both a new experimental design and simulations.

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Section: Design and Proceduresmentioning

confidence: 99%

Strength of preference and decisions under risk

Alós–Ferrer

Garagnani

2022

J Risk Uncertain

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“…economics literature contains research on the implications of the di¤erences in the utility-of strength of preferences-on stochastic choice (Mosteller and Nogee, 1951;Debreu, 1958). Further, there appears to be renewed interest in the topic (Ballinger and Wilcox, 1997;Blavatskyy and Pogrebna, 2010;Gerasimou, 2021;Alós-Ferrer and Garagnani, 2021,2022a,2022b. The use of line lengths as a proxy for utility has the advantage that we can make small changes in the di¤erences in the lines and observe the e¤ect on optimal choice.…”

Section: Random Utility and Random Choicementioning

confidence: 99%