WP 2022-01 Real Choices and Hypothetical Choices

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Forthcoming, Handbook of Choice Modeling

AUTHORS: Glenn W. Harrison

ABSTRACT: There is evidence that behavior changes when individuals make choices over hypothetical scenarios and stakes rather than real scenarios and stakes. What is the nature of this evidence, and how significant is it for different types of inferences? In particular, does it follow that "stated preferences" inferred from hypothetical choices differ all that much from the "preferences revealed" by real choices? What survey methods can better approximate real choices? What econometric methods allow one to pool hypothetical and real choices, when appropriate? Is the bias between real and hypothetical choices transferable from setting to setting?