Stochastic Choice and the Allocation of Cognitive Effort

@article{Moffatt2005StochasticCA,
  title={Stochastic Choice and the Allocation of Cognitive Effort},
  author={Peter G. Moffatt},
  journal={Experimental Economics},
  year={2005},
  volume={8},
  pages={369-388}
}
  • P. Moffatt
  • Published 1 December 2005
  • Economics, Psychology
  • Experimental Economics
Data from a risky choice experiment are used to estimate a fully parametric stochastic model of risky choice. As is usual with such analyses, Expected Utility Theory is rejected in favour of a form of Rank Dependent Theory. Then an estimate of the risk aversion parameter is deduced for each subject, and this is used to construct a measure of the “closeness to indifference'' of each subject in each choice problem. This measure is then used as an explanatory variable in a random effects model of… 
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13 References

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