Similar Search Results

Reconsidering the common ratio effect: The roles of compound independence, reduction, and coalescing

Schmidt, Ulrich; Seidl, Christian - Institut für Weltwirtschaft (IfW) - 2014

Common ratio effects should be ruled out if subjects' preferences satisfy compound independence, reduction of compound … lotteries, and coalescing. In other words, at least one of these axioms should be violated in order to generate a common ratio … observation of common ratio effects.We observe that compound independence and reduction of compound lotteries hold, whereas …

Persistent link: https://www.econbiz.de/10010886877

Testing Independence Conditions in the Presence of Errors and Splitting Effects

Birnbaum, Michael H.; Schmidt, Ulrich; Schneider, Miriam D. - Institut für Weltwirtschaft (IfW) - 2010

This paper presents an experimental test of several independence conditions implied by expected utility and alternative models. We perform a repeated choice experiment and fit an error model that allows us to discriminate between true violations of independence and those that can be attributed...

Persistent link: https://www.econbiz.de/10008631614

Allais Paradoxes Can be Reversed by Presenting Choices in Canonical Split Form

Birnbaum, Michael H.; Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2010

coalescing, the assumption that when two branches lead to the same consequence, they can be combined by adding their …

Persistent link: https://www.econbiz.de/10008631616

Paradoxes and Mechanisms for Choice under Risk

Cox, James C.; Sadiraj, Vjollca; Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2011

provides data for tests for portfolio effect, wealth effect, reduction, adding up, and cross-task contamination. Data from …

Persistent link: https://www.econbiz.de/10009144796

Risk Preferences may be Time Preferences: A Comment on Andreoni and Sprenger (2012)

Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2014

In an intensively discussed paper, Andreoni and Sprenger (2012) , henceforth A&S, present an experiment where subjects can allocate money between two different points of time under the condition of risk. A&S claim that their results refute discounted expected utility (DEU) as well as prospect...

Persistent link: https://www.econbiz.de/10010886922

Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison

Lönnqvist, Jan-Erik; Verkasalo, Markku; Walkowitz, Gari; … - Institut für Weltwirtschaft (IfW) - 2014

This paper compares two prominent empirical measures of individual risk attitudes — the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen, Falk, Huffman, Schupp, Sunde and Wagner (2011) — with respect to (a) their within-subject stability over...

Persistent link: https://www.econbiz.de/10010886955

Alternative Payoff Mechanisms for Choice under Risk

Cox, James C.; Sadiraj, Vjollca; Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2014

Most experiments on decision theory ask individual subjects to make more than one decision. The isolation hypothesis is commonly used to justify the choice of the random lottery incentive mechanism as the preferred payoff protocol. This research note reports on the main findings on the...

Persistent link: https://www.econbiz.de/10010886962

Endogenous Prospect Theory

Schmidt, Ulrich; Zank, Horst - Institut für Weltwirtschaft (IfW) - 2010

In previous models of (cumulative) prospect theory reference-dependence of preferences is imposed beforehand and the location of the reference point is exogenously determined. This paper provides an axiomatization of a new specification of cumulative prospect theory, termed endogenous prospect...

Persistent link: https://www.econbiz.de/10010955835

An experimental investigation of the disparity between WTA and WTP for lotteries

Schmidt, Ulrich; Traub, Stefan - Institut für Weltwirtschaft (IfW) - 2009

In this paper we experimentally investigate the disparity between willingness-to-accept (WTA) and willingness-to-pay (WTP) for risky lotteries. The direction of the income effect is reversed by endowing subjects with the highest price of a lottery when asking the WTP question. Our results show...

Persistent link: https://www.econbiz.de/10010956013

Estimating risk attitudes in conventional and artefactual lab experiments: The importance of the underlying assumptions

Drichoutis, Andreas C.; Koundouri, Phoebe - Institut für Weltwirtschaft (IfW) - 2012

In this paper the authors assess the importance of sample type in the estimation of risk preferences. The authors elicit and compare risk preferences from student subjects and subjects drawn from the general population, using the multiple price list method devised by Holt and Laury (Risk...

Persistent link: https://www.econbiz.de/10010956059