The BCD of Response Time Analysis in Experimental Economics

41 Pages Posted: 26 Feb 2014 Last revised: 29 Mar 2016

See all articles by Leonidas Spiliopoulos

Leonidas Spiliopoulos

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Human Development

Andreas Ortmann

UNSW Australia Business School, School of Economics

Date Written: March 28, 2016

Abstract

For decisions in the wild, time is of the essence. Available decision time is often cut short through natural or artificial constraints, or is impinged upon by the opportunity cost of time. Experimental economists have only recently begun to conduct experiments with time constraints and to analyze response time (RT) data, in contrast to experimental psychologists. RT analysis has proven valuable for the identification of decision processes, model comparison/selection and the investigation of heuristics that combine speed and performance by exploiting environmental regularities. Focusing on strategic decision making, we discuss the benefits, challenges, and desiderata (BCD) of RT analysis in decision making. Time-constrained decision making lies in the domain of procedural rather than substantive rationality. Consequently, unlocking the potential of RT requires the adoption of process-based models instead of outcome-based models. We critically examine different procedural models of choice and RT, and the various ways that time-constrained experiments can be conducted. We argue that RT analysis holds considerable potential for experimental economics, deserves greater attention as a methodological tool, and promises important insights on strategic decision making in naturally occurring experiments.

Keywords: Response time, experimental economics, procedural rationality, games, strategic decision making

JEL Classification: B40, C70, C91

Suggested Citation

Spiliopoulos, Leonidas and Ortmann, Andreas, The BCD of Response Time Analysis in Experimental Economics (March 28, 2016). Available at SSRN: https://ssrn.com/abstract=2401325 or http://dx.doi.org/10.2139/ssrn.2401325

Leonidas Spiliopoulos (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Human Development ( email )

Lentzeallee 94
D-14195 Berlin, 14195
Germany

Andreas Ortmann

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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