Abstract
Economic models are evaluated by testing the correctness of their predictions. We suggest an additional measure, “completeness”: the fraction of the predictable variation in the data that the model captures. We calculate the completeness of prominent models in three problems from experimental economics: assigning certainty equivalents to lotteries, predicting initial play in games, and predicting human generation of random sequences. The completeness measure reveals new insights about these models, including how much room there is for improving their predictions.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 956-990 |
| Number of pages | 35 |
| Journal | Journal of Political Economy |
| Volume | 130 |
| Issue number | 4 |
| DOIs | |
| State | Published - Apr 2022 |
Funding
are also grateful to Adrian Bruhin, Helga Fehr-Duda, Thomas Epper, Kevin Leyton-Brown, and James Wright for sharing data with us, and we are grateful for financial support from National Science Foundation grants SES 1643517, 1851629, and 195105. Data are provided as supplementary material online. This paper was edited by Emir Kamenica.
ASJC Scopus subject areas
- Economics and Econometrics