Exeter Prize for Research in Experimental Economics, Decision Theory and Behavioral Economics

The Exeter Prize is a prize for the best paper published in the previous calendar year in a peer-reviewed journal in the fields of Experimental Economics, Behavioural Economics and Decision Theory.

The winner of the inaugural Exeter Prize 2012 for Research in Experimental Economics, Decision Theory and Behavioral Economics is “Transitivity of Preferences” by Michel Regenwetter, Jason Dana and Clintin P. Davis-Stober, published in Psychological Review in 2011.

This paper examines the theory and empirical methods one might use to differentiate between individual preferences that are simply variable from those that exhibit some structural instability. The authors define the latter as when preferences systematically violate some axiom, and the former as when there is some process, outside the axiom system, affecting preferences.

Their enquiry is always conditional on some axiom system, implying one modeler’s error term is another modeler’s theoretical model at work. The major conclusion is that evidence for violations of transitivity is based on low‐power tests of data, where the power of the test derives from a theoretical model. The authors stress the “a” here, and that different theoretical models would imply different power.

This paper addresses a deep conceptual problem (the issue of transitivity of preferences) in a very clear and precise way. Our panel praised the mix of theory, the empirical methodology that matches the theory, and the substantive message at the end. This is also a paper that should have a significant impact in mathematical psychology and the cross‐over group of empirical decision theorists in economics.

The selection process for the Exeter Prize began in June 2012, when we sent an open invitation to scholars from around the world to nominate the best paper in print in a peer-reviewed journal in 2011 in the fields of Experimental Economics, Decision Theory and Behavioural Economics.

We collated all the nominations and generated a shortlist, which was presented to our jury, whose members were Glenn Harrison (Georgia State University); Uzi Segal (Boston College) and Shmuel Zamir (Hebrew University).