Work

When Are Decisions Improvable? An Evaluation of Diagnostic Methods

Year: 2026

Type: report

Abstract: We evaluate three methods for identifying improvable choices: documenting specific misconceptions (the Characterization Assessment method), gauging confidence in choices (the Decision Confidence method), and showing that specific behavioral patterns in the domain of interest also emerge in a related domain where they are objectively suboptimal (the Pattern Matching method). In experiments involving risky choice, the three methods imply that different choices are improvable and have conflicting implications regarding legitimate risk preferences. We clarify the assumptions underlying each method and reevaluate the evidence on risk-taking in light of their limitations. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Source: National Bureau of Economic Research

DOI: 10.3386/w34979

Authors: B. Douglas Bernheim, Aldo Lucia, Kirby Nielsen, Charles Sprenger

Institutions: National Bureau of Economic Research, Stanford University, The Ohio State University, California Institute of Technology, University of California San Diego

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: National Science Foundation

Award: Doctoral Dissertation Research in Economics: Expected Utility Core of Risk Preferences

OpenAlex ID: W7140092418

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Cited by: 1

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