Proceedings Eighteenth Conference on Theoretical Aspects of Rationality and Knowledge

Piermont, Evan; Zuazo-Garin, Peio

doi:10.4204/eptcs.335.25

Cited by 1 publication

(2 citation statements)

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“…More specifically, our approach of unpacking failures of standard postulates into failures of STP or genuine failures of standard postulates can be applied to understand related anomalies by developing theoretical frameworks that allow STP to fail. Recent theoretical approaches along this dimension include Cohen and Li (2022), Chew and Wang (2022), Piermont (2022), Piermont and Zuazo-Garin (2022), and de Clippel (2022).…”

Section: Discussionmentioning

confidence: 99%

“…Meanwhile, Chew and Wang (2022) rely on STP to extend the notion of obvious dominance. Piermont (2022) develops a model in which the decision-maker misperceives or ignores certain hypothetical events, which allows for STP to fail and can accommodate several of our experimental findings (see also Piermont and Zuazo-Garin (2022)). Finally, de Clippel (2022) provides implications of failures of STP in game theory and mechanism design.…”

Section: Connections To the Literaturementioning

confidence: 99%

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Contingent Thinking and the Sure-Thing Principle: Revisiting Classic Anomalies in the Laboratory

Esponda,

Vespa

2023

Review of Economic Studies

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We present an experimental framework to study the extent to which failures of contingent thinking explain classic anomalies in a broad class of environments, including overbidding in auctions and the Ellsberg paradox. We study environments in which the subject’s choices affect payoffs only in some states, but not in others. We find that anomalies are in large part driven by incongruences between choices in the standard presentation of each problem and a ‘contingent’ presentation, which focuses the subject on the set of states where her actions matter. Additional evidence suggests that this phenomenon is in large part driven by people’s failure to put themselves in states that have not yet happened even though they are made aware that their actions only matter in those states.

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Section: Discussionmentioning

confidence: 99%