On the explanatory value of preference imprecision

This event is jointly hosted with the Department of Economics and Related Studies.

Chris Starmer is a Professor of Experimental Economics at the University of Nottingham.  His main research interests are in individual and strategic decision making, experimental economics and the methodology of economics.

Abstract

Recent research invokes preference imprecision to explain violations of standard individual decision theory.  While these inquiries are suggestive, the nature and potential importance of imprecision remain poorly understood.  We develop a new measurement tool and deploy it in an experimental investigation of imprecision in valuations of lotteries, designed to explore three main issues: Does imprecision vary coherently with lottery structure?  Is it stable on repeat measurement? Might it provide a unified explanation of deviations from the standard theory of choice under risk?  We find that measured preference imprecision varies coherently with lottery structure and is remarkably stable for given lotteries; but our results do not suggest that preference imprecision is a main driver behind the violations of standard decision theory that we consider.

Read Professor Starmer's full profile