When Choices Are Mistakes

Abstract

Using a laboratory experiment, we identify whether decision-makers consider it a mistake to violate canonical choice axioms. To do this, we incentivize subjects to report axioms they want their decisions to satisfy. Then, subjects make lottery choices which might conflict with their axiom preferences. In instances of conflict, we give subjects the opportunity to re-evaluate their decisions. We find that many individuals want to follow canonical axioms and revise their choices to be consistent with the axioms. In a shorter online experiment, we show correlations of mistakes with response times and measures of cognition. (JEL C91, D12, D44, D91)