The Impact of Learning by Thought on Violations of Independence and Coalescing

This paper reports results from a repeated experiment on decision making under risk where subjects must address the same choice problems in several rounds. We investigate how behavior changes in the course of the experiment. The design focuses on choice problems allowing for direct tests of independence and coalescing. We show that inconsistencies in responses as well as violations of independence and coalescing decrease from earlier to later rounds. Our results provide evidence in favor of expected utility in conjunction with the discovered preference hypothesis.