Misconceptions and game form recognition: Challenges to theories of revealed preference and framing (Revised)

Paper Number: 
1364
Creation date: 
09/10/2012
Abstract: 

This study explores the tension between the standard economic theory of preference and non-standard theories of preference that are motivated by an underlying theory of framing. A simple experiment fails to measure a known preference. The divergence of the measured preference from the known preference reflects a mistake, arising from some subjects' misconception of the game form. We conclude that choice data should not be granted an unqualified interpretation of preference revelation. Mistakes in choices obscured by a possible error at the foundation of the theory of framing, can masquerade as having been produced by non-standard preferences.

Paper Length: 
40
Keywords: 
Preference Elicitation; Misconceptions; Reference Dependence; Endowment Effect