| Philippe Fevrier, CREST - LEI Michael Visser, CREST-LEI |
| A Study of Consumer Behavior Using Laboratory Data |
| Session: C-1-2 Friday 11 August 2000 by Visser, Michael |
| This paper reports the results of an experiment on individual consumer behavior. The experiment was designed to address the following questions. Do participants behave as utility-maximizing agents? Are there variables (socio-economic characteristics, experimental conditions) that have an effect on the probability of being non-rational? And finally, to what extent does the presence of non-rational individuals affect the estimation results of demand equations? Revealed preference tests indicate that 29% of the individuals do not behave as utility-maximizing agents. Gender and the times spent on performing experimental tasks have a significant effect on the likelihood of being non-rational, but the level of remuneration does not. The estimation results of some commonly used demand systems and tests of the Slutsky restrictions are affected by the presence of non-rational individuals in the experimental sample. |
| Submitted paper full-text in .pdf |