Are People Bayesian? Uncovering Behavioral Strategies
- Creators
- El-Gamal, Mahmoud
- Grether, David M.
Abstract
Economists and psychologists have recently been developing new theories of decision making under uncertainty that can accommodate the observed violations of standard statistical decision theoretic axioms by experimental subjects. We propose a procedure which finds a collection of decision rules that best explain the behavior of experimental subjects. The procedure is a combination of maximum likelihood estimation of the rules together with an implicit classification of subjects to the various rules, and a penalty for having too many rules. We apply our procedure to data on probabilistic updating by subjects in four different universities. We get remarkably robust results which show that the most important rules used by the subjects (in order of importance) are Bayes's rule, a representativeness rule (ignoring the prior), and to a lesser extent, conservatism (over-weighting the prior).
Additional Information
Published as El-Gamal, Mahmoud A., and David M. Grether. "Are people Bayesian? Uncovering behavioral strategies." Journal of the American statistical Association 90, no. 432 (1995): 1137-1145.Attached Files
Submitted - sswp919.pdf
Files
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Additional details
- Eprint ID
- 80629
- Resolver ID
- CaltechAUTHORS:20170818-145519355
- Created
-
2017-08-21Created from EPrint's datestamp field
- Updated
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 919