When Choices are Mistakes
60 Pages Posted: 18 Nov 2019 Last revised: 1 Feb 2020
Date Written: November 5, 2019
Using a laboratory experiment, we identify whether decision makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report which of several axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their stated axiom preferences. We give them the opportunity to re-evaluate their decisions when lotteries conflict with desired axioms. We find that a majority of individuals want to follow the axioms and revise their lottery choices to be consistent with them. We interpret this to mean that most axiom violations in our sample were mistakes.
Keywords: mistakes; rationality; normative versus descriptive theory; procedural decision making
JEL Classification: C90, D01, D60, D80
Suggested Citation: Suggested Citation