CFDP 1526

Randomized Sign Test for Dependent Observations on Discrete Choice under Risk


Publication Date: June 2005

Pages: 26


This paper proposes nonparametric statistical procedures for analyzing discrete choice models of affective decision making. We make two contributions to the literature on behavioral economics. Namely, we propose a procedure for eliciting the existence of a Nash equilibrium in an intrapersonal, potential game as well as randomized sign tests for dependent observations on game-theoretic models of affective decision making. This methodology is illustrated in the context of a hypothetical experiment — the Casino Game.


Behavioral economics, Affective decision making, Intrapersonal potential games, Randomized sign tests, Dependent observations, Adapted sequences, Martingale-difference sequences

JEL Classification Codes:  C12, C32, C35, C72, C91, D11, D81