Jack Adeney

Expected Utility requires that individuals never strictly prefer a convex mixture of two lotteries over either of the two. However, recent experimental literature has found that these ``mixture effects'' are pervasive. Decision theoretic models used to rationalize such effects can broadly be split into three categories: 1) decision makers have a strict preference for mixtures, 2) mixing is the realization of strict preferences with noise, and 3) mixing is a representation of uncertainty over preferences. I develop a two-part experiment to identify the dominant mechanism underlying mixture effects. I find that less than 15% of observations are consistent with convex preferences, whereas approximately 75% are consistent with stochastic choice. These findings have important implications for policy development and behavioral welfare analysis when interpreting stochastic choice data.

This manuscript identifies a largely unrecognized connection between, and distinction in results for, Ellsberg's three-color paradox and Allais' common-consequence paradox. Both phenomena derive from reducing a common state payment to zero, but the reactions to this reduction are directionally opposed across the two problems. Using a common experimental framework, we develop intermediate tasks to identify the source of this difference. Key to the difference is the reversal of Allais' common consequence paradox when problem parameters are made more similar to those for Ellsberg.

Why do negotiations stall even when information is relatively transparent? Classical theories attribute delay to hidden information. We provide experimental evidence for an alternative mechanism: proposers start with low offers out of fear that generous early concessions would raise the other side's expectations and prolong agreement. This reflects strategic uncertainty: negotiated outcomes rest on fragile beliefs that may quickly turn against oneself. Our design limits informational asymmetries and varies offer visibility and seller commitment to isolate this expectation-management channel. The results show that the fear of raising expectations generates costly delay. Mediation mitigates these inefficiencies.

Economists have developed the revealed preference approach to learn about people’s preferences from observing their choices. This study compares two traditional elicitation methods for collecting choice data: 1) asking people to choose their preferred outcome, and 2) asking people to eliminate outcomes that are not preferred. Via an incentivised online experiment, this study replicates the findings that chosen sets tend to be larger in the elimination frame compared to the choice frame. However, this study is the first to recognise that choices within the elimination frame are less consistent with welfare maximising outcomes than those provided in the choice frame. A detailed analysis of selection order suggests that decision makers eliminate sequentially from worst to best, and that welfare loss is driven by early stopping. Motivated by the natural assumption that attention between options is shifted as a result of switching frames, these differences are interpreted through the lens of a consideration set approach. Findings highlight how subtle changes in elicitation methods can have significant impacts on decision maker welfare.