Irrational Beliefs, Rational Actions: Understanding Subjects' Behavior in a Laboratory Experiment
Mathew D. McCubbins
Department of Political Science and Law School, Duke University
University of Southern California - Department of Political Science; University of Southern California - School of International Relations
August 4, 2009
Rational choice models are commonly used in political science. However, many experimental results find humans do not behave as we would predict from simple rational choice models. In this paper we report on the result of experiments in which subjects both play a standard trust game and make predictions about other players in an experiment, thereby revealing information about how they expect others to behave in the experiment. We find that conditional on their beliefs, subjects play quite rationally in these games. The results suggest we need to understand individuals’ beliefs and knowledge when we model behavior in experimental and empirical settings.
Number of Pages in PDF File: 30
Date posted: August 7, 2009 ; Last revised: September 9, 2009