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Modelling the Stochastic Component of Behaviour in Experiments: Some Issues for the Interpretation of Data

Published online by Cambridge University Press:  14 March 2025

Graham Loomes
Graham Loomes*
Affiliation:
University of East Anglia
*
email: g.loomes@uea.ac.uk
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Abstract

This paper considers some of the questions raised by the fact that people's behaviour—including their behaviour in experimental environments—has a stochastic component. The nature of this component may be crucial to the interpretation of the patterns of data we observe and the choice of statistical criteria for favouring one hypothesis at the expense of others. However, it is arguable that insufficient consideration has been given to the way(s) in which the stochastic element is modelled. The paper aims to explore some of the issues involved.

Keywords

stochastic choicedecision errorimprecisionanomalies

JEL classification

C12: Hypothesis Testing: General C91: Laboratory, Individual Behavior C73: Stochastic and Dynamic Games • Evolutionary Games • Repeated Games

Information

Type
Research Article
Information
Experimental Economics , Volume 8 , Issue 4: Exploring the Error in Experimental Economics , December 2005 , pp. 301 - 323
Copyright
Copyright © 2005 Economic Science Association

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