A laboratory study of Bayesian updating in small feedback-based decision problems

Takemi Fujikawa; Sobei H. Oda

A laboratory study of Bayesian updating in small feedback-based decision problems

Takemi Fujikawa
, Sobei H. Oda

Research output: Contribution to journal › Article

Abstract

This study explores small feedback-based decision problems experimentally. Conducted were the experiments in which the decision-makerÃƒÂ¢Ã¢"šÂ¬Ã¢"žÂ¢s payoff distribution was limited to either favorable distribution or unfavorable distribution. The first remarkable observation revealed complexity/loss aversion in the experiment. The second observation included the law of small numbers. Deviations from maximization were also observed. Finally, we investigated the imperfect Bayesian decision-makers observed in the experiment by exploring to what extent the decision-makers could update subjective Bayesian probability and rely on it in making decisions.

Original language	English
Number of pages	5
Journal	American Journal of Applied Sciences
Publication status	Published - 2005

Keywords

Bayesian statistical decision theory
decision making
experimental economics
mathematical models
statistical decision
uncertainty

Cite this

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title = "A laboratory study of Bayesian updating in small feedback-based decision problems",

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AU - Oda, Sobei H.

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AB - This study explores small feedback-based decision problems experimentally. Conducted were the experiments in which the decision-makerÃƒÂ¢Ã¢"šÂ¬Ã¢"žÂ¢s payoff distribution was limited to either favorable distribution or unfavorable distribution. The first remarkable observation revealed complexity/loss aversion in the experiment. The second observation included the law of small numbers. Deviations from maximization were also observed. Finally, we investigated the imperfect Bayesian decision-makers observed in the experiment by exploring to what extent the decision-makers could update subjective Bayesian probability and rely on it in making decisions.

KW - Bayesian statistical decision theory

KW - decision making

KW - experimental economics

KW - mathematical models

KW - statistical decision

KW - uncertainty

UR - http://handle.uws.edu.au:8081/1959.7/45755

M3 - Article

SN - 1546-9239

JO - American Journal of Applied Sciences

JF - American Journal of Applied Sciences

ER -

A laboratory study of Bayesian updating in small feedback-based decision problems

Abstract

Keywords

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