Since its existence decision theory, the mathematical body of axioms of rational choice, has been confronted with contradicting empirical evidence. The talk will introduce two recent experimental studies that use lab experiments in combination with the field to question central tenets of the theory of decision.

In the first experiment, we measure willingness to pay for privacy in a field experiment. Participants were given the choice to buy a maximum of one DVD from one of two online stores. In one treatment, DVDs were one Euro cheaper at the store requesting more personal information, and almost all buyers chose the cheaper store. Surprisingly, in the second treatment when prices were identical, participants bought from both shops equally often. As the participants overwhelmingly voiced concerns about privacy, results show that they do not put their money where their mouth is.

In the second experiment, participants face the same decision problem twice without knowing which of their two decisions determines their final payment. The participants have a tendency to contradict themselves in the two decisions and thereby delegate the final decision to the random device that selects the payoff-relevant task. This contradicts a basic assumption contained in most decision-theoretic choice models, namely stochastic dominance. The evidence is related to a large empirical data set where German university applicants submit multiple preference rankings of universities. There, too, the applicants often contradict themselves by reversing their preference order.