Economic experiments are often based on the claim that some heterogeneous behavioural trait affects response to treatment. This trait is measured in another part of the experiment, using a multiple price list. Frequently, choices on such a list are not perfectly consistent. In this paper we argue that this inconsistency is a resource. It informs the researcher about the precision with which the trait is measured. Precision can be estimated with a measurement error model. With data from an experiment that studies the relation between risk aversion and punishment we illustrate the approach, and show that it matters.

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Journal of Economic Behavior & Organization

Engel, C.W, & Kirchkamp, O. (2019). How to deal with inconsistent choices on multiple price lists. Journal of Economic Behavior & Organization, 160, 138–157. doi:10.1016/j.jebo.2019.02.024