Preferences for Hedging in Multiple-Choice Tests

50 Pages Posted: 4 Mar 2022

See all articles by Jingcheng Fu

Jingcheng Fu

National University of Singapore (NUS), Department of Economics

Xing Zhang

Sungkyunkwan University

Songfa Zhong

National University of Singapore (NUS) - Department of Economics

Date Written: January 16, 2022

Abstract

This paper proposes two novel scoring rules which allow the test-takers to hedge when responding to multiple-choice questions. We randomly assign 2,986 participants in an IQ test into three conditions. In the control condition, participants choose one option, and receive one point for correct response. In the treatment conditions, they can explicitly hedge by choosing k options: if the correct option is among the k chosen options, they receive 1/k point in the outcome-mixing treatment, and one point with probability 1/k in the probability-mixing treatment. We find that participants in both treatments hedge pervasively and score lower compared to those in the control. The observed differences depend on risk preferences of the participants. While scores in three conditions exhibit similar psychometric quality, we observe a significant correlation between academic performance and IQ score measured in the probability-mixing condition, but not in the other two conditions. These observations contribute to the literature on preference for hedging, the design of multiple-choice tests, and the relationship between risk preferences and cognitive ability.

Keywords: convex preference, deliberate randomization, cognitive ability, multiple-choice test, experiment

JEL Classification: C91, D81

Suggested Citation

Fu, Jingcheng and Zhang, Xing and Zhong, Songfa, Preferences for Hedging in Multiple-Choice Tests (January 16, 2022). Available at SSRN: https://ssrn.com/abstract=4009983 or http://dx.doi.org/10.2139/ssrn.4009983

Jingcheng Fu (Contact Author)

National University of Singapore (NUS), Department of Economics ( email )

Singapore
Singapore

Xing Zhang

Sungkyunkwan University ( email )

53 Myeongnyun-dong 3-ga Jongno-ju
Guro-gu
Seoul, 110-745
Korea, Republic of (South Korea)

Songfa Zhong

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

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