GGR376H5 Chapter 1: Homework reading Jan 8th
Document Summary
Almost very decision we make involves uncertainty in some way, both over individual events and over sequences of events. Previous research has demonstrated a number of biases in how individuals perceive and react to this uncertainty, but the demonstrations have been primarily in the lab, using undergraduate student participants. This paper uses data from individuals gambling with their own money in a casino to test for the presence of these biases in a naturally occurring environment. The behaviour we observe is indeed consistent with previously observed biases, providing an important robustness check on the previous research. We observe significant individual heterogeneity among the population in their direction and strength of each bias. In addition, our data allows us to identify these biases separately within each individual, and to examine the correlation between them.
