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Series:   Elements in Behavioural and Experimental Economics

Imperfect Perception and Stochastic Choice in Experiments

Published online by Cambridge University Press:  16 December 2023

Pablo Brañas-Garza  and
John Alan Smith
Pablo Brañas-Garza
Affiliation:
Universidad Loyola Andalucía
John Alan Smith
Affiliation:
Rutgers University, Camden

Summary

The branch of psychology that studies how physical objects are perceived by subjects is known as psychophysics. A feature of the experimental design is that the experimenter presents objectively measurable objects that are imperfectly perceived by subjects. The responses are stochastic in that a subject might respond differently in otherwise identical situations. These stochastic choices can be compared to the objectively measurable properties. This Element offers a brief introduction to the topic, explains how psychophysics insights are already present in economics, and describes experimental techniques with the goal that they are useful in the design of economics experiments. Noise is a ubiquitous feature of experimental economics and there is a large strand of economics literature that carefully considers the noise. However, the authors view the psychophysics experimental techniques as uniquely suited to helping experimental economists uncover what is hiding in the noise.
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Keywords

experimental economicspsychophysicsrandom choicepsychology and economicspsychometric function
Type
Element
Information
Series: Elements in Behavioural and Experimental Economics
Online ISBN: 9781009049207
Publisher: Cambridge University Press
Print publication: 01 February 2024

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