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By T. L. Cleave

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According to the other hypotheses behavior is determined by expectations. , 1983). , Messe and Sivacek, 1979; Yamagishi and Sato, 1986). According to the false consensus hypothesis the fact that a decision-maker makes a choice narrows her or his view of the world. (S)he makes a choice and reasons that there is no solid ground to conclude that other people would make a different choice. An impartial spectator would not be bothered by the false consensus effect, because (s)he does not make the choice which causes the narrow view.

The results are typically based on public good games with a step-level production function in which subjects are asked to estimate the probabilities that their contribution will be futile, critical and redundant for the provision of the public good. These estimates are subsequently used to estimate expected net benefits from contributing. A factor which may affect the empirical results of these papers is that subjects lack a (financial) incentive to report their true expectations. This potential pitfall is avoided in the present study where subjects are rewarded for their expectations by an incentive compatible mechanism (cf.

3 McFadden (1974) and Maddala (1983) prove this result for the specific extreme value distribution with A. = 1 and 'Y = O. The proof for the general case is similar. Parameter A. affects the quanta! 3 and parameter 'Y cancels out. 5 The parameter A. can be interpreted as the level of precision or the level of rationality of the person. If A. equals zero, a person choostil each alternative with probability 1/2 , independent of the expected payoffs. If A. approaches 00, the individual chooses the alternative with the higher expected payoff (utility) with probability 5The quantal response function can easily be adapted to allow for more than two alternatives.

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