Centre for Experimental Economics
Changes in Individual and/or Aggregate?
John D Hey and Noemi Pace
Applied Economics Letters 2014.
Abstract
The majority of papers reporting the results of experimental tests on individual behaviour usually concentrate on the average or aggregate behaviour of the subjects, even though different subjects may exhibit different kinds of behaviour. At the same time it is well-known that subjects are noisy in their responses, and thus may change their behaviour during an experiment. The question then arises as to whether this noise causes average behaviour to change during an experiment. We take the data from an experiment on behaviour under ambiguity, which tries to identify which preference functional subjects are using, and analyse it in two halves. We find that, while some individual preferences seem to change from the first to the second half, on average, preferences are unchanged (though there is a reduction in the noise in the second half). This is a reassuring message for those who want to draw inferences from experiments.
The Individual or Aggregate (MS Word 
, 33kb)) paper will be found here, as will the Web Appendix (MS Word , 29kb).