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Irrational Beliefs, Rational Actions: Understanding Subjects' Behavior in a Laboratory Experiment

30 Pages Posted: 7 Aug 2009 Last revised: 9 Sep 2009

Mathew D. McCubbins

Department of Political Science and Law School, Duke University

Nicholas Weller

University of California, Riverside (UCR)

Date Written: August 4, 2009

Abstract

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.

Suggested Citation

McCubbins, Mathew D. and Weller, Nicholas, Irrational Beliefs, Rational Actions: Understanding Subjects' Behavior in a Laboratory Experiment (August 4, 2009). Available at SSRN: https://ssrn.com/abstract=1443980 or http://dx.doi.org/10.2139/ssrn.1443980

Mathew D. McCubbins

Department of Political Science and Law School, Duke University ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Nicholas Weller (Contact Author)

University of California, Riverside (UCR) ( email )

900 University Avenue
Riverside, CA 92521
United States

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