In a decision problem comprised of multiple intermediate choices, subjects may fail to take into account the interdependencies between their choices. We design and deploy a novel experiment to understand how people make decisions in such problems . We provide revealed preference tests of three models of choice bracketing: broad, narrow, and partial-narrow. We apply these tests in three experiments to determine how subjects bracket in portfolio allocation under risk, social allocation, and induced-utility shopping experiments . 40-44 \\%DIF < of our subjects are consistent with narrow bracketing, while only 0-15\\% are consistent with broad bracketing. Classifying subjects while adjusting for models' predictive precision, 75\\% of subjects are best described by narrow bracketing, 14\\% by broad bracketing, and 3\\% by intermediate cases.abstract %DIF > of our subjects are consistent with narrow bracketing while only 0-15\\% are consistent with broad bracketing. Classifying subjects while adjusting for models' predictive precision, 73\\% of subjects are best described by narrow bracketing, 14\\% by broad bracketing, and 5\\% by intermediate cases.
In a decision problem comprised of multiple choices, a person may fail to take into account the interdependencies between her choices. To understand how people make decisions in such problems we design a novel experiment and revealed preference tests that determine how each subject brackets her choices. In separate portfolio allocation under risk, social allocation, and induced-utility shopping experiments , we find that 40-43 \\%DIF < of our subjects are consistent with narrow bracketing, while only 0-15\\% are consistent with broad bracketing. Classifying subjects while adjusting for models' predictive precision, 75\\% of subjects are best described by narrow bracketing, 14\\% by broad bracketing, and 3\\% by intermediate cases.abstract %DIF > of our subjects are consistent with narrow bracketing while only 0-15\\% are consistent with broad bracketing. Classifying subjects while adjusting for models' predictive precision, 73\\% of subjects are best described by narrow bracketing, 14\\% by broad bracketing, and 5\\% by intermediate cases.
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