How to Deal with Inconsistent Choices on Multiple Price Lists
In this paper we argue that this inconsistency is a resource. It informs the researcher about the precision with which the trait is measured. Precision can be estimated with a measurement error model.
With data from an experiment that studies the relation between risk aversion and punishment we illustrate the approach, and show that it matters.
Keywords: Measurement error, risk, lab experiment, public good, Bayesian inference.
JEL: C91, D43, L41
- Here is the most recent version of the working paper as of 18 January 2019.
- An earlier version of the paper was circulated with the title Measurement errors of risk aversion and how to correct them.
- Data and R files
- On 21 February 2019, the paper has been accepted for publication at the Journal of Economic Behaviour & Organization..