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...

Much experimental effort has been expended in attempts to establish the relative superiority of Expected Utility theory and the many recently-developed alternatives as descriptions of the behaviour of subjects in risky choice decision problems. The cumulative evidence shows clearly that there is...

We carry out two experiments to test a model of herd behaviour based on the work of Banerjee (1992). He shows that herding occurs as a result of people observing the actions of others and using this information in their own decision rule. However, in our experiments herding does not occur as...

A dynamic decision making experiment recently conducted on individuals suggested that people may look ahead but seem either unable or unwilling to predict their own future behaviour. In order to distinguish between these two possibilities, we repeated the experiment with pairs of individuals....

Two recent papers, Harless and Camerer (1994) and Hey and Orme (1994), are both addressed to the same question: which is the `best' theory of decision making under risk? As an essential part of their separate approaches to an answer to this question, both sets of authors had to make an...

This paper reports on an experiment designed to test whether pairs of individuals are able to exploit efficiency gains in the sharing of a risky financial prospect. Observations from a previous experiment had suggested a general rejection of efficiency in favour of ex post equality. The present...

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...