Failures in Contingent Reasoning: The Role of Uncertainty

S-Tier
Journal: American Economic Review
Year: 2019
Volume: 109
Issue: 10
Pages: 3437-74

Authors (3)

Alejandro Martínez-Marquina (not in RePEc) Muriel Niederle (not in RePEc) Emanuel Vespa (University of California-San D...)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We propose a new channel to account for the difficulties of individuals with contingent reasoning: the presence of uncertainty. When moving from an environment with one state of known value to one with multiple possible values, two changes occur. First, the number of values to consider increases. Second, the value of the state is uncertain. We show in an experiment that this lack of certainty, or the loss of the Power of Certainty, impedes payoff maximization and that it accounts for a substantial portion of the difficulties with contingent reasoning.

Technical Details

RePEc Handle
repec:aea:aecrev:v:109:y:2019:i:10:p:3437-74
Journal Field
General
Author Count
3
Added to Database
2026-01-29