Abstract
In the summer of 1986 we carried out a large-scale experimental investigation of consumption under uncertainty. Our purpose was to test the predictions of the famous Hall theory of optimal consumption under income uncertainty, and, in particular, to test the proposition (revealed to us in a preliminary pilot study) that behaviour is not optimal in an absolute sense, but that its comparative static implications agree with those of optimality theory. In total, 128 subjects performed the experiment: 8 for each of 16 parameter sets. Preliminary analysis lends support to our proposition.
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References
Hall, R. E. (1978): Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence, Journal of Political Economy, 86, pp. 971–987.
Hey, J. D. (1980): Optimal Consumption under Income Uncertainty: An Example and a Conjecture, Economics Letters, 5, pp. 129–133.
Hey, J. D. (1987): A Pilot Experimental Investigation into Optimal Consumption under Uncertainty, in S. Maital (ed.): Applied Behavioral Economics, North Holland.
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© 1988 Springer-Verlag Berlin Heidelberg
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Hey, J.D., Dardanoni, V. (1988). A Preliminary Analysis of a Large-Scale Experimental Investigation into Consumption under Uncertainty. In: Tietz, R., Albers, W., Selten, R. (eds) Bounded Rational Behavior in Experimental Games and Markets. Lecture Notes in Economics and Mathematical Systems, vol 314. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48356-1_5
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DOI: https://doi.org/10.1007/978-3-642-48356-1_5
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-50036-0
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