Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation of choice functions. I test this assumption using data from a new experiment designed for this purpose. Within the limits of the experiment’s identifying restriction and designed power to detect deviations from conditional independence, conditional independence is not rejected. In naturally occurring data, concerns about violations of conditional independence are certainly proper and well-taken (for well-known reasons). However, when an experimenter employs the particular experimental mechanisms and designs used here, the findings suggest that conditional independence is an acceptable assumption for analyzing data so generated.

The author presents new estimates of the probability weighting functions found in rank-dependent theories of choice under risk. These estimates are unusual in two senses. First, they are free of functional form assumptions about both utility and weighting functions, and they are entirely based on binary discrete choices and not on matching or valuation tasks, though they depend on assumptions concerning the nature of probabilistic choice under risk. Second, estimated weighting functions contradict widely held priors of an inverse-s shape with fixed point well in the interior of the (0,1) interval: Instead the author usually finds populations dominated by "optimists" who uniformly overweight best outcomes in risky options. The choice pairs used here mostly do not provoke similarity-based simplifications. In a third experiment, the author shows that the presence of choice pairs that provoke similarity-based computational shortcuts does indeed flatten estimated probability weighting functions.

Managers of workforce training programs are often unable to afford costly, full-fledged experimental or nonexperimental evaluations to determine their programs’ impacts. Therefore, many rely on the survey responses of program participants to gauge program impacts. Smith, Whalley, and Wilcox present the first attempt to assess such measures despite their already widespread use in program evaluations. They develop a multidisciplinary framework for addressing the issue and apply it to three case studies.

I discuss three concerns for those of us who attempt to measure utilities of outcomes as those appear in the Expected Utility and Rank-Dependent Utility theories. First, decisions are inconsistent, and we must address that in a rigorous theory-based manner that does no violence to the theoretical meaning of risk aversion. Second, we must think carefully about the methods (mechanisms, types of choices or decisions, and the particular alternatives) we will use to get information about our subjects’ preferences, and why we will use them. Third, we need to know when our subjects will know enough about our mechanisms and types of decisions to informatively express their preferences among the alternatives we give them.

From 1960 to 2015, opinions of US federal district court judges (trial judges) in cases involving challenges to executive branch authority show that these judges favor executive authority less as they age. We suggest that district judges know that elevation to the federal circuit court of appeals becomes increasingly improbable, and hence have less reason to cooperate with the executive, with advancing age. Political variables, seniority of judges, and other variables introduced as extra regressors do not reverse this main result, nor does it appear to be the product of cohort effects or selection off the district court. When there are contemporaneous vacancies on their circuit courts, district judges in the 11 state circuits (but not the District of Columbia Circuit) are also more likely to favor the executive.

How well do program participants assess program performance ex-post? In this paper we compare participant evaluations based on survey responses to econometric impact estimates obtained using data from the experimental evaluation of the U.S. Job Training Partnership Act. We have two main findings: First, the participant evaluations are unrelated to the econometric impact estimates. Second, the participant evaluations do covary with impact proxies such as service intensity, outcome levels, and before-after outcome differences. Our results suggest that program participants behave as 'lay scientists' who seek to estimate the impact of the program but face cognitive challenges in doing so.

Behavior differs between transparent and nontransparent presentations of decisions, but "transparent presentation" has not been precisely defined. We formally define "transparent frames" for risk and time, establish their uniqueness, provide algorithms for constructing them, and compare them with "standard" presentation formats. A logic emerges for predicting systematic shifts in choice under risk and over time, and how violations of rational choice theory will depend on frames. An experiment verifies most of those predictions in choice under risk. We extend results to choice under uncertainty and also predict frame dependence of ambiguity aversion, a result supported by recent experimental evidence.

In his exposition of subjective expected utility theory, Savage (1954) proposed that the Allais paradox could be reduced if it were recast into a format which made the appeal of the independence axiom of expected utility theory more transparent. Recent studies consistently find support for this prediction. We consider a salience-based choice model which explains this frame-dependence of the Allais paradox. We then derive the novel prediction that the presentation format responsible for reductions in Allais-style violations of expected utility theory will also reduce Ellsberg-style violations of subjective expected utility theory. This format makes the appeal of Savage’s “sure thing principle” more transparent. We design an experiment to test this prediction and find strong support for such frame-dependence of ambiguity aversion in Ellsberg-style choices. In particular, we observe markedly less ambiguity-averse behavior in Savage’s matrix format than in a more standard “prospect” format. This finding poses a new challenge for the leading models of ambiguity aversion.

Storytelling can affect wellbeing and fitness by transmitting information and reinforcing cultural codes of conduct. Despite their potential importance, the development and timing of storytelling skills, and the transmission of story knowledge have received minimal attention in studies of subsistence societies that more often focus on food production skills. Here we examine how storytelling and patterns of information transmission among Tsimane forager-horticulturalists are predicted by the changing age profiles of storytellers’ abilities and accumulated experience. We find that storytelling skills are most developed among older adults who demonstrate superior knowledge of traditional stories and who report telling stories most. We find that the important information transmitted via storytelling typically flows from older to younger generations, and stories are primarily learned from older same-sex relatives, especially grandparents. Our findings suggest that the oral tradition provides a specialized late-life service niche for Tsimane adults who have accumulated important experience and knowledge relevant to foraging and sociality, but have lost comparative advantage in other productive domains. These findings may help extend our understanding of the evolved human life history by illustrating how changes in embodied capital predict the development of information transmission services in a forager-horticulturalist economy.

For simple prospects routinely used for certainty equivalent elicitation, random expected utility preferences imply a conditional expectation function that can mimic deterministic rank-dependent preferences. That is, a subject with random expected utility preferences can have expected certainty equivalents exactly like those predicted by rank-dependent probability weighting functions of the inverse-s shape discussed by Quiggin (J Econ Behav Organ 3:323–343, 1982 ) and advocated by Tversky and Kahneman (J Risk Uncertainty 5:297–323, 1992 ), Prelec (Econometrica 66:497–527, 1998 ) and other scholars. Certainty equivalents may not nonparametrically identify preferences: Their conditional expectation (and critically, their interpretation) depends on assumptions concerning the source of their variability.

Millikan's famous oil drop experiment is scrutinized from the viewpoint of the methodological dicta of the credibility revolution.

This article examines behavior in two-person constant-sum Colonel Blotto games in which each player maximizes the expected total value of the battlefields won. A lottery contest success function is employed in each battlefield. Recent experimental research on such games provides only partial support for Nash equilibrium behavior. We hypothesize that the salience of battlefields affects strategic behavior (the salient target hypothesis). We present a controlled test of this hypothesis – against Nash predictions – when the sources of salience come from certain asymmetries in either battlefield values or labels (as in Schelling 1960). In both cases, subjects over-allocate the resource to the salient battlefields relative to the Nash prediction. However, the effect is stronger with salient values. In the absence of salience, we replicate previous results in the literature supporting the Nash prediction.

and behave rationally - that is, the group uses language to become a single player when it pays the group to do so and when conditions are right. The authors understand this and stress that repeated communication opportunities are an essential part of these right conditions. To reiterate: All of the authors' results concerning repeated communication situations clearly support cooperative behavior more than they support noncooperative behavior. This book will probably be useful to some experimentalists and political economists. But to give a more focused and enthusiastic endorsement, I think the book would be a good supplementary text for graduate public policy studies. The theory makes clear contact with some of the essential issues of local versus centralized policy-making and enforcement; and then it convincingly illustrates those issues with a combination of experiments and field evidence. It would certainly be a salutary palate cleanser after the heavy dinner of Leviathan and Tragedy-of-the-Commons that such students are always fed.

OBJECTIVES:We investigate whether age profiles of Tsimane forager-horticulturalists' reported skill development are consistent with predictions derived from life history theory about the timing of productivity and reproduction. Previous studies of forager skill development have often focused on a few abilities (e.g. hunting), and neglected the broad range of skills and services typical of forager economies (e.g. childcare, craft production, music performance, story-telling).MATERIALS AND METHODS:By systematically examining age patterns in reported acquisition, proficiency, and expertise across a broad range of activities including food production, childcare, and other services, we provide the most complete skill development study of a traditional subsistence society to date.RESULTS:Our results show that: (1) most essential skills are acquired prior to first reproduction, then developed further so that their productive returns meet the increasing demands of dependent offspring during adulthood; (2) as postreproductive adults age beyond earlier years of peak performance, they report developing additional conceptual and procedural proficiency, and despite greater physical frailty than younger adults, are consensually regarded as the most expert (especially in music and storytelling), consistent with their roles as providers and educators. We find that adults have accurate understandings of their skillsets and skill levels -an important awareness for social exchange, comparison, learning, and pedagogy.DISCUSSION:These findings extend our understanding of the evolved human life history by illustrating how changes in embodied capital and the needs of dependent offspring predict the development of complementary skills and services in a forager-horticulturalist economy.

Microeconometric treatments of discrete choice under risk are typically homoscedastic latent variable models. Specifically, choice probabilities are given by preference functional differences (given by expected utility, rank-dependent utility, etc.) embedded in cumulative distribution functions. This approach has a problem: Estimated utility function parameters meant to represent agents' degree of risk aversion in the sense of Pratt (1964) do not imply a suggested "stochastically more risk averse" relation within such models. A new heteroscedastic model called "contextual utility" remedies this, and estimates in one data set suggest it explains (and especially predicts) as well as or better than other stochastic models.

We use a randomized field experiment to estimate the effect of having a United States bank account on Mexican migrants' savings and remittances. With support from the Mexican Consulate and a local bank targeting Hispanic clientele, we randomly assigned assistance in obtaining a matricula consular card, which we call treatment. This consulate-issued identification card is accepted by many U.S. financial institutions for the purpose of establishing identity for new accounts, and has little other use in the small U.S. city where we conduct the experiment. Migrants in the treatment group were 38 percentage points more likely to open a U.S. bank account, increased their savings as a share of income by 9 percentage points and decreased their remittances to Mexico as a share of income by 6 percentage points. There is heterogeneity of treatment effects by migrants' reported degree of control over how their remittances are allocated in Mexico. Among migrants who report having no control (as opposed to shared or sole control), treatment causes a higher take-up of U.S. bank accounts, a larger increase in total savings, a shift away from Mexico savings toward U.S. savings, and an increase in income. These results suggest that extending bank access can raise savings in a low-income minority population. Additionally, they suggest that issues of control affect intra-household resource allocations.

We use a randomized field experiment to estimate the effect of having a U.S. bank account on Mexican migrants' savings and remittances. With support from the Mexican Consulate and a local bank targeting Hispanic clientele, we randomly assigned assistance in obtaining a matricula consular card, which we call "treatment." This consulate-issued identification card is accepted by many U.S. financial institutions for the purpose of establishing identity for new accounts. Treated migrants were 38 percentage points more likely to open a U.S. bank account, increased their savings as a share of income by 9 percentage points and reduced their remittances to Mexico as a share of income by 6 percentage points. There is heterogeneity of treatment effects by migrants' reported degree of control over the spending decisions of remittance recipients. Treatment increases savings regardless of migrants' reported degree of control. However, among migrants who report having no control, there is a larger increase in total savings, a shift in the composition of savings away from Mexico toward the U.S., and an increase in income. This study adds to the very limited literature on the causal effects of banking the unbanked; our results suggest that extending bank access can raise savings in a low-income minority population. Additionally, it improves our understanding of how resource allocation decisions in migrant households are made; our results suggest that issues of control alter allocations and income, which rejects the unitary model and perhaps even the collective model of the household.

Experiments on saving behavior reveal substantial heterogeneity of behavior and performance. We show that this heterogeneity is reliable and examine several potential sources of it, including cognitive ability and personality scales. The strongest predictors of both behavior and performance are two cognitive ability measures. We conclude that complete explanations of heterogeneity in dynamic decision making require attention to complexity and individual differences in cognitive constraints.