Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/mea/meawpa/02005.html
   My bibliography  Save this paper

How Do Behavioral Assumptions Affect Structural Inference? Evidence From A Laboratory Experiment

Author

Listed:
  • Daniel Houser
  • Joachim Winter

    (Munich Center for the Economics of Aging (MEA))

Abstract
We use a laboratory experiment to investigate the effect that assuming rational expectations has on structural inference in a dynamic discrete choice decision problem. Our experimental design induces preferences up to each subject’s subjective rates of time preference, leaving unrestricted only this parameter and the decision rule that the subject uses in solving the problem. We analyze the data under the assumption that all subjects use the rational expectations decision rule, and also under weaker behavioral assumptions that allow for heterogeneity in the way people form decisions. We find no evidence that assuming rational expectations distorts inferences about the cross-sectional distribution of discount rates.

Suggested Citation

  • Daniel Houser & Joachim Winter, 2002. "How Do Behavioral Assumptions Affect Structural Inference? Evidence From A Laboratory Experiment," MEA discussion paper series 02005, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:02005
    as

    Download full text from publisher

    File URL: http://mea.mpisoc.mpg.de/uploads/user_mea_discussionpapers/dp05.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hey, John D., 1981. "Are optimal search rules reasonable? and vice versa? (And does it matter anyway?)," Journal of Economic Behavior & Organization, Elsevier, vol. 2(1), pages 47-70, March.
    2. Sims,Christopher A. (ed.), 1994. "Advances in Econometrics," Cambridge Books, Cambridge University Press, number 9780521444606, October.
    3. Hotz, V Joseph & Miller, Robert A, 1988. "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 91-118, January.
    4. Pierre-Olivier Gourinchas & Jonathan A. Parker, 2002. "Consumption Over the Life Cycle," Econometrica, Econometric Society, vol. 70(1), pages 47-89, January.
    5. Cox, James C & Oaxaca, Ronald L, 1999. "Can Supply and Demand Parameters Be Recovered from Data Generated by Market Institutions?," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(3), pages 285-297, July.
    6. Ellison, Glenn & Fudenberg, Drew, 1993. "Rules of Thumb for Social Learning," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 612-643, August.
    7. Saul Pleeter & John T. Warner, 2001. "The Personal Discount Rate: Evidence from Military Downsizing Programs," American Economic Review, American Economic Association, vol. 91(1), pages 33-53, March.
    8. Sims,Christopher A. (ed.), 1994. "Advances in Econometrics," Cambridge Books, Cambridge University Press, number 9780521444590, October.
    9. Seale, Darryl A. & Rapoport, Amnon, 1997. "Sequential Decision Making with Relative Ranks: An Experimental Investigation of the "Secretary Problem">," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(3), pages 221-236, March.
    10. Anderlini, Luca & Canning, David, 2001. "Structural Stability Implies Robustness to Bounded Rationality," Journal of Economic Theory, Elsevier, vol. 101(2), pages 395-422, December.
    11. Harald Uhlig & Martin Lettau, 1999. "Rules of Thumb versus Dynamic Programming," American Economic Review, American Economic Association, vol. 89(1), pages 148-174, March.
    12. Krusell, Per & Smith, Anthony Jr., 1996. "Rules of thumb in macroeconomic equilibrium A quantitative analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 527-558, April.
    13. Anderlini, Luca & Canning, David, 2000. "Structural stability and robustness to bounded rationality," Discussion Paper Series In Economics And Econometrics 2, Economics Division, School of Social Sciences, University of Southampton.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Houser, Daniel & Winter, Joachim, 2000. "Time preference and decision rules in a price search experiment," Sonderforschungsbereich 504 Publications 01-34, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    2. Juan M. Contreras & Sven H. Sinclair, 2008. "The Labor Supply Response in Macroeconomic Models: Working Paper 2008-07," Working Papers 20141, Congressional Budget Office.
    3. Zhigang Feng & Jianjun Miao & Adrian Peralta‐Alva & Manuel S. Santos, 2014. "Numerical Simulation Of Nonoptimal Dynamic Equilibrium Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(1), pages 83-110, February.
    4. Rodepeter, Ralf & Winter, Joachim, 1999. "Rules of thumb in life-cycle savings models," Sonderforschungsbereich 504 Publications 99-81, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    5. Robin Jessen & Davud Rostam-Afschar & Sebastian Schmitz, 2018. "How important is precautionary labour supply?," Oxford Economic Papers, Oxford University Press, vol. 70(3), pages 868-891.
    6. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Maarten van Rooij, 2020. "Consumption Uncertainty and Precautionary Saving," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 148-161, March.
    7. Houser, Daniel, 2003. "Bayesian analysis of a dynamic stochastic model of labor supply and saving," Journal of Econometrics, Elsevier, vol. 113(2), pages 289-335, April.
    8. Orlando Gomes, 2021. "Growth theory under heterogeneous heuristic behavior," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 533-571, April.
    9. Michaelides, Alexander & Ng, Serena, 2000. "Estimating the rational expectations model of speculative storage: A Monte Carlo comparison of three simulation estimators," Journal of Econometrics, Elsevier, vol. 96(2), pages 231-266, June.
    10. Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(2), pages 395-427.
    11. Contreras, Juan & Sinclair, Sven, 2008. "Labor supply response in macroeconomic models: Assessing the empirical validity of the intertemporal labor supply response from a stochastic overlapping generations model with incomplete markets," MPRA Paper 10533, University Library of Munich, Germany.
    12. Kirman, Alan & Teyssiere, Gilles, 2005. "Testing for bubbles and change-points," Journal of Economic Dynamics and Control, Elsevier, vol. 29(4), pages 765-799, April.
    13. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    14. Richard V. Burkhauser & Shuaizhang Feng & Stephen P. Jenkins, 2009. "Using The P90/P10 Index To Measure U.S. Inequality Trends With Current Population Survey Data: A View From Inside The Census Bureau Vaults," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 166-185, March.
    15. Federico Di Pace & Matthias Hertweck, 2019. "Labor Market Frictions, Monetary Policy, and Durable Goods," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 32, pages 274-304, April.
    16. Steven T Berry & Giovanni Compiani, 2023. "An Instrumental Variable Approach to Dynamic Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(4), pages 1724-1758.
    17. repec:hal:wpspec:info:hdl:2441/5rkqqmvrn4tl22s9mc4b6ga2g is not listed on IDEAS
    18. repec:wyi:journl:002087 is not listed on IDEAS
    19. Federico Ciliberto & Elie Tamer, 2009. "Market Structure and Multiple Equilibria in Airline Markets," Econometrica, Econometric Society, vol. 77(6), pages 1791-1828, November.
    20. Michelacci, Claudio & Zaffaroni, Paolo, 2000. "(Fractional) beta convergence," Journal of Monetary Economics, Elsevier, vol. 45(1), pages 129-153, February.
    21. Ahn, JaeBin & Choi, Moon Jung, 2020. "From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data," Japan and the World Economy, Elsevier, vol. 56(C).
    22. van Soest, A.H.O. & Das, J.W.M., 2000. "Family Labor Supply and Proposed Tax Reforms in the Netherlands," Discussion Paper 2000-20, Tilburg University, Center for Economic Research.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mea:meawpa:02005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Henning Frankenberger (email available below). General contact details of provider: http://www.mea.mpisoc.mpg.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.