Probability Matching, a classical violation of expected utility maximization, refers to people's tendency to randomize, or even match their choice frequency to the outcome probability, when choosing over binary lotteries that differ only in their probabilities. Why? I present an experiment designed to distinguish between several broad classes of explanations: (1) models of Correlation-Invariant Stochastic Choice --- randomizing due to factors orthogonal to the correlation between lotteries, such as non-standard preferences or errors, and (2) models of Correlation-Sensitive Stochastic Choice --- deliberately randomizing due to misperceived hedging opportunities, especially when lotteries are negatively correlated. My experimental design differentiates between their testable predictions by varying the correlation between lottery outcomes. The findings indicate that the first class, despite being home to most existing theories, has limited explanatory power. Using additional treatment, I rule out Similarity Heuristics as a competing explanation with the second class. The results indicate that a vast majority of individuals deliberately randomize due to misperceived hedging opportunities.

We examine whether people can correctly evaluate the value of information. In our experiment, we employ the canonical "balls and boxes" task, where participants update their beliefs about the true state (box chosen) based on balls drawn from the box. Participants receive different representations of the information, featuring varying degrees of simplification relative to the raw data. Before participants undertake the tasks, we elicit their willingness to pay (WTP) for each representation. We first find that subjects' WTP does not strictly align with theoretical informativeness; specifically, subjects prefer to see a "proportion" (e.g., 20% orange balls), even though it is not the most informative representation. Furthermore, we find that participants do not necessarily perform better with the representation they prefer, suggesting a lack of meta-cognitive awareness regarding how effectively they can utilize the information.