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Measuring subjective decision confidence

Arts, Sara and Ong, Qiyan and Qiu, Jianying (2020): Measuring subjective decision confidence.

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We examine whether the way individuals randomize between options captures their decision confidence. In two experiments in which subjects face pairs of options (a lottery and a varying sure payment), we allow subjects to choose randomization probabilities according to which they would receive each option. Separately, we obtain two measures of self-reported decision confidence for choosing between the two options. The randomization probabilities are well correlated and correspond with absolute levels of self-reported confidence measures. This relationship is robust to two exogenous manipulations of decision confidence, where we vary the complexity of the lottery and subjects' experience with the lottery, consistent with the predictions of two different theoretical frameworks incorporating preference uncertainty. Our findings suggest that randomization probabilities could serve as an incentivized quantitative measure of decision confidence.

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