But we have to take into account that responses are noisy. By this we mean that subjects
do not always report their true preferences, or that they state different preferences when
asked the same question on different occasions. This is true in all kinds of experiments,
and the noise has to be taken into account in the design of the experiment and in the
analysis of the data. Towards the end of this section we will talk a lot about how we
might specify the noise, but for the time being we will start simple. To illustrate the pro-
cedures and implications we use the seminal paper by Colin Camerer (1989) who was
one of ...
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