Replication data for: Who Is (More) Rational?
Principal Investigator(s): View help for Principal Investigator(s) Syngjoo Choi; Shachar Kariv; Wieland Müller; Dan Silverman
Version: View help for Version V1
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Project Citation:
Choi, Syngjoo, Kariv, Shachar, Müller, Wieland, and Silverman, Dan. Replication data for: Who Is (More) Rational? Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116126V1
Project Description
Summary:
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Revealed preference theory offers a criterion for decision-making quality: if decisions are high quality then there exists a utility function the choices maximize. We conduct a large-scale experiment to test for consistency with utility maximization. Consistency scores vary markedly within and across socioeconomic groups. In particular, consistency is strongly related to wealth: a standard deviation increase in consistency is associated with 15-19 percent more household wealth. This association is quantitatively robust to conditioning on correlates of unobserved constraints, preferences, and beliefs. Consistency with utility maximization
under laboratory conditions thus captures decision-making ability
that applies across domains and influences important real-world outcomes.
Scope of Project
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
D81 Criteria for Decision-Making under Risk and Uncertainty
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
D15 Intertemporal Household Choice; Life Cycle Models and Saving
G11 Portfolio Choice; Investment Decisions
D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
D81 Criteria for Decision-Making under Risk and Uncertainty
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
D15 Intertemporal Household Choice; Life Cycle Models and Saving
G11 Portfolio Choice; Investment Decisions
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