Experimental Economics

, Volume 13, Issue 3, pp 334–345 | Cite as

Bounding preference parameters under different assumptions about beliefs: a partial identification approach

  • Charles BellemareEmail author
  • Luc Bissonnette
  • Sabine Kröger


We show how bounds around preferences parameters can be estimated under various levels of assumptions concerning the beliefs of senders in the investment game. We contrast these bounds with point estimates of the preference parameters obtained using non-incentivized subjective belief data. Our point estimates suggest that expected responses and social preferences both play a significant role in determining investment in the game. Moreover, these point estimates fall within our most reasonable bounds. This suggests that credible inferences can be obtained using non-incentivized beliefs.


Partial identification Preferences Beliefs Decision making under uncertainty Investment game 

JEL Classification



Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Andersen, S., Harrison, G. W., Lau, M. I., & Rutström, E. E. (2006). Elicitation using multiple price list formats. Experimental Economics, 9, 383–405. CrossRefGoogle Scholar
  2. Andreoni, J., & Miller, J. (2002). Giving according to GARP: an experimental test of the consistency of preferences for altruism. Econometrica, 70(2), 737–753. CrossRefGoogle Scholar
  3. Bellemare, C., Bissonnette, L., & Kröger, S. (2007). Flexible approximation of subjective expectations using probability questions: an application to the investment game, IZA Discussion paper 3121. Google Scholar
  4. Bellemare, C., Kröger, S., & van Soest, A. (2008). Measuring inequity aversion in a heterogeneous population using experimental decisions and subjective probabilities. Econometrica, 76, 815–839. CrossRefGoogle Scholar
  5. Bellemare, C., Sebald, A., & Strobel, M. (2010, forthcoming). Measuring the willingness to pay to avoid guilt: estimation using equilibrium and stated belief models. Journal of Applied Econometrics. Google Scholar
  6. Berg, J., Dickhaut, J., & McCabe, K. (1995). Trust, reciprocity, and social history. Games and Economic Behavior, 10, 122–142. CrossRefGoogle Scholar
  7. Charness, G., & Rabin, M. (2002). Understanding social preferences with simple tests. Quarterly Journal of Economics, 117, 817–869. CrossRefGoogle Scholar
  8. Ciliberto, F., & Tamer, E. (2009). Market structure and multiple equilibria in airline markets. Econometrica, 77(6), 1791–1828. Google Scholar
  9. Coller, M., & Williams, M. (1999). Elicitating individual discount rates. Experimental Economics, 2, 107–127. Google Scholar
  10. Cox, J. C. (2004). How to identify trust and reciprocity. Games and Economic Behavior, 46, 260–281. CrossRefGoogle Scholar
  11. Eckel, C., & Wilson, R. K. (2004). Is trust a risky decision? Journal of Economic Behavior and Organization, 55, 447–465. CrossRefGoogle Scholar
  12. Ellingsen, T., Johannesson, M., Torsvik, G., & Tjøtta, S. (2010). Testing guilt aversion. Games and Economic Behavior, 68, 95–107. CrossRefGoogle Scholar
  13. Engelmann, D., & Strobel, M. (2004). Inequality aversion, efficiency and maximin preferences in simple distribution experiments. American Economic Review, 94(4), 857–869. CrossRefGoogle Scholar
  14. Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10(2), 171–178. CrossRefGoogle Scholar
  15. Holt, C. A., & Laury, S. K. (2002). Risk aversion and incentive effects. American Economic Review, 92(5), 1644–1655. CrossRefGoogle Scholar
  16. Honoré, B., & Tamer, E. (2006). Bounds on parameters in dynamic discrete choice models. Econometrica, 74, 611–629. CrossRefGoogle Scholar
  17. Houser, D., Schunk, D., & Winter, J. (2010). Distinguishing trust from risk: an anatomy of the investment game. Journal of Economic Behavior and Organization, 74(1–2), 72–81. CrossRefGoogle Scholar
  18. Manski, C. (1989). Anatomy of the selection problem. Journal of Human Resources, 24(3), 343–360. CrossRefGoogle Scholar
  19. Manski, C. (1994). The selection problem (Vol. 1, pp. 143–170). Cambridge University Press, Cambridge. Google Scholar
  20. Manski, C., & Tamer, E. (2002). Inference on regressions with interval data on a regressor or outcome. Econometrica, 70, 519–546. CrossRefGoogle Scholar

Copyright information

© Economic Science Association 2010

Authors and Affiliations

  • Charles Bellemare
    • 1
    Email author
  • Luc Bissonnette
    • 2
  • Sabine Kröger
    • 1
  1. 1.Département d’économiqueUniversité LavalQuébecCanada
  2. 2.Department of Econometrics and ORTilburg UniversityTilburgThe Netherlands

Personalised recommendations