This paper represents an intersection between two lines of research. The first is portfolio choice theory, which underlies much of finance; the second is the elicitation of preferences under uncertainty. The theory of the behaviour of financial markets builds heavily on portfolio choice theory;...

Potentially dynamically-inconsistent individuals create particular problems for economics, as their behaviour depends upon whether and how they attempt to resolve their potential inconsistency. This paper reports on the results of a new experiment designed to help us distinguish between the...

Numerous prior experimental studies have attempted to elicit people’s preferences over income distributions through appropriately incentivated questions asking subjects to choose between distributions. Instead, we follow the theoretical literature and start with the principles underlying these...

This paper provides a very simple experimental test of a prediction of Nash Bargaining Theory that seems counterintuitive. The context is a simple bargaining problem between two players who have to agree a choice from three alternatives. One alternative favors one player and a second favors the...

There are two basic ways of assessing the goodness of fit of theories to data - one based on stochastic theory (for example, the maximised likelihood in some form) and one based on deterministic theory, for example, Selten's Measure of Predictive Success. This paper explores the second of these...

Central to many theoretical accounts of the process by which (rational) people tackle dynamic decision problems is the concept of a plan: a set of conditional decisions as to what would be decided under certain conditions (imposed by Nature). The notion of a plan is clearly central to theories...

This paper reports on an experimental test of the Principle of Optimality in dynamic decision problems. This Principle, which states that the decision-maker should always choose the optimal decision at each stage of the decision problem, conditional on behaving optimally thereafter, underlies...

Timing-independence implies that individuals are indifferent between a sequential choice problem and a planned choice problem which are strategically equivalent except for the timing of resolution of the uncertainty. This paper reports an experiment in which we investigate whether the timing of...

We report on a simple experiment which enables us to infer how far people plan ahead when taking decisions in a dynamic risky context. Usually economic theory assumes that people plan right to the end of the planning horizon. We find that this is true for a little over half of the subjects in...