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Does Learning Diminish Violations of Independence, Coalescing and Monotonicity?

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Abstract

Violations of expected utility theory are sometimes attributed to imprecise preferences interacting with a lack of learning opportunity in the experimental laboratory. This paper reports an experimental test of whether a learning opportunity which engenders accurate probability assessments, by enhancing understanding of the meaning of stated probability information, causes anomalous behaviour to diminish. The data show that whilst in some cases expected utility maximising behaviour increases with the learning opportunity, so too do systematic violations. Therefore, there should be no presumption that anomalous behaviour under risk is transient and that discovered preferences will be appropriately described by expected utility theory.

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Authors and Affiliations

  1. Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham, Nottingham, NG7 2RD, UK

    Steven J. Humphrey

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  1. Steven J. Humphrey
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Correspondence to Steven J. Humphrey.

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Humphrey, S.J. Does Learning Diminish Violations of Independence, Coalescing and Monotonicity?. Theor Decis 61, 93–128 (2006). https://doi.org/10.1007/s11238-006-8047-x

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