Does Market Experience Promote Rational Choice? Experimental Evidence from Rural Ethiopia

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

Abstract

We organize a field experiment with sesame farmers and brokers in northern Ethiopia to explore whether market experience fosters rational behavior—proxied by fewer Generalized Axiom of Revealed Preference (GARP) violations in a simple choice experiment. In the baseline study, farmers and brokers performed equally well or badly, which is consistent with qualitative evidence that the prior “trading experience” of our brokers is not obtained in a competitive setting. Following random assignment to a competitive market setting—a one-day trading session in a sesame auction—we find that treated farmers and brokers behave more rationally than their peers in the control group.
Original languageEnglish
Pages (from-to)407-429
JournalEconomic Development and Cultural Change
Volume61
Issue number2
DOIs
Publication statusPublished - 2013

    Fingerprint

Keywords

  • behavior
  • rules
  • garp

Cite this