Abstract
We always make decisions, sometimes on individuals, like shopping, allocating time to different task, etc., and sometimes strategically, like promoting goods to customers, playing tennis, etc. Theoretically, we often assume that people do maximization in these decisions. These assumptions of rationalities are prominent in economics. However, empirically, the quality of these decisions is mixed and depends on the ability whether people do their maximization. We believe that most people are not rational, do non-optimal behavior, i.e., not maximizing their utilities. However, little is known when we look at them in a general decision-making mechanism including these two kinds of irrationality. How common and how heterogeneous is it for people to exhibit multiple irrationality? How are rationalities correlated and interact within-people and how distinct are they? What do they imply or affect field behaviors in real lives?
We address such questions with evidence, from a large national real estate brokerage firm, on the brokers' experimental data from multiple task on rationality and their field behaviors of multiple real estate brokerage. For each of 10000+ broker agents, we measure a set of decision makings quality. Specifically, we measure GARP consistency in standard convex budget sets of risk preference, violations of choices in an evaluating real estates task as proxy variables for individual decision-making rationality. We measure strategic decision-making rationality in 11-20 Game, as proxy variables for strategic decision makings skills. We also measure cognitive skills in Raven's IQ Test, theory of mind ability in Reading the Minds of Eyes, personality traits in Big Five and demographics. Then we try to link these experimental results to their field behaviors, like performance of real estate brokerage transactions.