Experimental work regularly finds that individual choices are not rationalized by any preference . Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a distribution of individuals with well-defined preferences. To examine this phenomenon, we study the relationship between deterministic and stochastic rationality. We show that a population can be stochastically rationalized even when half of the individuals in the population cannot be rationalized by well-defined preferences. We also find the ability to detect individuals in a population who are not stochastically rationalized can decrease as sample size increases. We discuss how these issues interact with cross-sectional and panel sampling schemes.
Experimental work regularly finds that individual choices are not rationalized . Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a distribution of well-defined preferences. We study the relationship between deterministic and stochastic rationality. We show that a population can be stochastically rationalized even when half of the individuals in the population cannot be rationalized by well-defined preferences. We also find the ability to detect individuals in a population who are not stochastically rationalized can decrease as sample size increases. We discuss how these issues interact with cross-sectional and panel sampling schemes.
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by any preference
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individuals with
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To examine this phenomenon, we
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