Contact: Professor Robert Sugden
Tel. (01603) 593423
Fax. (01603) 250434
EMail r.sugden@uea.ac.uk
This project focuses on problems with the traditional economic theory of how individuals make choices. The theory assumes that individuals have consistent preferences which they can use as a basis for rational decision-making between alternatives. In practice people often seem to operate in ways that contradict this assumption and this is particularly true when risk or uncertainty is involved or when rewards or penalties are some time distant in the future.
Traditional economic theory underpins much practical policy-making. For example, decisions about the use of resources in the health care and transport sectors are often guided by cost-benefit methods which try to discover people's preferences for health, safety and environmental quality. These methods require the basic assumption that individuals have consistent preferences.
This project will use laboratory experiments to examine the extent to which people are in fact consistent in their preferences. The experiments follow five lines of enquiry, examining the effect of incentives, the extent to which people learn from past experience, the extent to which they carry over consistent patterns of preferences between different tasks, the extent to which they are influenced by other members of their immediate group and the way in which the discipline of participation in a market modifies preferences.
The findings of the work will have considerable relevance to current theory-building in economics and in other social sciences. It will also have implications for the practical application of the traditional economic theory of preferences as consistent determinants of patterns of choice.
ROBERT SUGDEN is Professor of Economics at the University of East Anglia. He has carried out a considerable quantity of theoretical and experimental work on problems of economic choice and published extensively.
JANE BEATTIE is Lecturer in Experimental Psychology at the University of Sussex and author of a number of articles on decision-making
ROBIN CUBITT is Lecturer in Economics at the University of East Anglia and author of a number of articles on the theory of choice.
GRAHAM LOOMES is Professor of Economics and Director of the Centre for Experimental Economics at the University of York, and Director of the ESRC Programme on Risk and Human Behaviour.
CHRIS STARMER is Lecturer in Economics at the University of East Anglia and author of a number of articles on the economic theory of choice.
OTHER RESEARCHERS:
Janet Anderson, Economics Research Centre, University of East Anglia.
Norman Spivey, Centre for Experimental Economics, University of York.
Seth Bullock, Department of Experimental Psychology, University of Sussex.
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