Revealed Incomplete Preferences under Uncertainty
نویسندگان
چکیده
In this paper we experimentally document the existence of incomplete preferences in decision making under uncertainty. In a series of incentivized decision tasks subjects have to choose between a risky and an ambiguous prospect. Active choices between prospects can as well be avoided by selecting a fair chance device that eventually assigns one of the two prospects to the decision maker. We observe that half of the subjects repeatedly choose the chance device and show that behavior can not be reconciled with theories assuming completeness of preferences. In a second experiment we show that indecisiveness is robust to a prize variation and verify that the observed behavior is consistent with the existence of incomplete preferences relations. Our results also present a caveat to the presence of ambiguity aversion: rather than being averse to ambiguity per-se, subjects in our experiment appear averse to making choices under uncertainty. We also find a strong gender effect: female subjects are much more likely to avoid active choice. Draft version: comments highly welcome.
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