Multiple-switching behavior in choice-list elicitation of risk preference

Soo Hong Chew, Bin Miao, Qiang Shen, Songfa Zhong

Research output: Contribution to journalArticlepeer-review

Abstract

This study examines multiple-switching behavior (MSB) in choice-list elicitation of risk preference from the perspectives of stochastic choice. We distinguish between “regular” and “irregular” MSB, and find that subjects with more irregular MSB are more likely to violate first-order stochastic dominance. In contrast, subjects with more regular MSB are more likely to concurrently exhibit non-expected utility behavior and reduce compound lottery, and to deliberately randomize in repeated choice. Our results suggest the need to diagnose the quality of MSB when applying choice-list elicitations, and distinguish stochastic choice models including random utility and deliberate randomization.

Original languageEnglish (US)
Article number105510
JournalJournal of Economic Theory
Volume204
DOIs
StatePublished - Sep 2022

Keywords

  • Choice list
  • Deliberate randomization
  • Experiment
  • Random utility
  • Risk preference
  • Stochastic choice

ASJC Scopus subject areas

  • Economics and Econometrics

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