An Empirical Evaluation of the Toolbox Model of Lottery Choices

• 成果类型: Article
• 署名作者: Stahl, Dale O.
• 署名单位: University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00700
• 发表日期: 2018-07
• 页码: 528-534
• 关键词: expected utility-theory; prospect-theory; RISK

摘要

Can a toolbox of simple heuristic rules help explain lottery choices relative to expected utility theory (EUT)? While a mixture model of EUT plus heuristic rules will obviously fit data better than EUT only, given the small sample sizes, there is a danger of overfitting. Therefore, instead of goodness-of-fit measures, we focus on forecasting performance. Using two data sets of binary lottery choices and reasonable holdout subsets for testing forecasting performance, we find that the EUT-only model forecasts better than the toolbox mixture model with EUT. Even when the toolbox model with EUT fits the data significantly better, EUT-only forecasts better.