Applied economics: Model-rich approaches to eliciting weak preferences

Dr Georgios Gerasimou, University of St Andrews

'Model-Rich Approaches to Eliciting Weak Preferences: Evidence from a Multi-Valued Choice Experiment'
Wednesday 8 December, 3.30pm - 5pm
Zoom online seminar

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Abstract

This paper contributes to the problem of eliciting and distinguishing between a decision makers' strict preferences and their possible indifference or incomparability/indecisiveness. Every subject in both treatments of an incentivised lab experiment could choose multiple alternatives from those available to them in each of the 50 distinct menus of 6 pairs of popular gift cards that they saw. Subjects in the non-forced-choice treatment could, in addition, avoid/delay making an active choice at those menus. Applying a non-parametric optimisation method on data collected from 273 subjects, we find that nearly 60% of them are well-approximated by an indifference-permitting model of complete- or incomplete-preference maximisation. The recovered preferences typically have a non-trivial indifference part and, where relevant, a distinct incomparability/indecisiveness part. The two kinds of distinctions between indifference and indecisiveness that are uncovered by this method are theory-guided and documented empirically for the first time. Two aspects of the experimental design, finally, allow for interpreting an additional 10% of subjects as revealing a systematic preference for randomisation or satisficing.

Biography

Dr Georgios Gerasimou is a Reader in Economics at the University of St Andrews. His main interests revolve around behavioural economics and bounded rationality. Dr Gerasimou studies problems in these areas using theoretical, experimental and computational methods, and his research has been published in, among other journals, the Economic Journal, Journal of Economic Theory, American Economic Journal: Microeconomics, Quantitative Economics and European Economic Review. He received his PhD in Economics from the University of Cambridge in 2011 and has been at St Andrews since.


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First published: 16 November 2021