Non-Choice Evaluations Predict Behavioral Responses to Changes in Economic Conditions

B. Douglas Bernheim, Daniel Björkegren, Jeffrey Naecker and Antonio Rangel ()

No 19269, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A central task in microeconomics is to predict choices in as-yet-unobserved situations (e.g., after some policy intervention). Standard approaches can prove problematic when sufficiently similar changes have not been observed or do not have observable exogenous causes. We explore an alternative approach that generates predictions based on relationships across decision problems between actual choice frequencies and non-choice subjective evaluations of the available options. In a laboratory experiment, we find that this method yields accurate estimates of price sensitivities for a collection of products under conditions that render standard methods either inapplicable or highly inaccurate.

JEL-codes: C91 D12 H31 Q51 (search for similar items in EconPapers)
Date: 2013-08
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-upt
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