Economics Dictionary of ArgumentsHome
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| Preferences: Preferences are our relative likings for different things. They are shaped by our individual experiences, values, and goals. See also Actions, Action theory, Goals, Purposes, Experience, Values, Rationality._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Experimental Economics on Preferences - Dictionary of Arguments
Parisi I 88 Preferences/Experimental economics/Sullkivan/Holt: The growing experimental literature on eliciting risk preferences is an example.16 Approaches to eliciting beliefs about uncertain and future events (e.g. Palfrey and Wang, 2009(1); Holt and Laury, 2014(2)) are closely related to risk preference elicitation, with similar application to understanding judicial motivations.* Random device: By way of illustration, the Holt and Smith (2016)(3) belief elicitation procedure derives quantitative measures of subjective beliefs by asking subjects to choose between two random devices. a) The first device, the “event lottery,” provides a fixed payment (e.g. $100) if an uncertain event of interest is observed (e.g. the defendant is found innocent). b) The second device, the “dice lottery,” provides the same payment ($100) when a random draw from the standard uniform distribution Parisi I 89 exceeds a specified probability threshold. Thresholds: Given an event of interest, subjects in the belief elicitation experiment must decide whether they would prefer the event lottery (which pays when the event occurs) or the dice lottery (which pays by pure chance) for each of a menu of dice lotteries with different probability thresholds. Subject to a single-crossing constraint, the cut-off point at which a subject no longer prefers the dice lottery over the event lottery reveals the subject’s implicit assessment of the probability of the event. Cf. >Threshold rules. The experiment thus uses subjects’ desire to win a valuable prize to elicit both the (conscious) effort of the subject to accurately guess the probability of the uncertain event and the (perhaps unconscious) revelation of this subjective probability assessment to the researcher. Problems: The absence of any clearly self-oriented incentives in many adjudicative postures begs the question whether subjects in such preference or belief elicitation experiments could be adequately incentivized by narrative interest alone. * For a recent survey of this literature, see Schotter and Trevino (2014)(4). 1. Palfrey, T. R. and S. W. Wang (2009). “On Eliciting Beliefs in Strategic Games.” Journal of Economic Behavior & Organization 71: 98–109. 2. Holt, C. A. and S. K. Laury (2014). “Assessment and Estimation of Risk Preferences,” in M. J. Machina and W. K. Viscusi, eds., Handbook of the Economics of Risk and Uncertainty, 135–202. Amsterdam: Elsevier B.V. 3. Holt, C. A. and A. M. Smith (2016). Belief Elicitation with a Synchronized Lottery Choice Menu that is Invariant to Risk Attitudes, American Economic Journal: Microeconomics 8(1): 110–139. 4. Schotter, A. and I. Trevino (2014). “Belief Elicitation in the Laboratory” Annual Review of Economics 6: 103–128. Sullivan, Sean P. and Charles A. Holt. „Experimental Economics and the Law“ In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Experimental Economics Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
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