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Alternative Payoff Mechanisms for Choice under Risk
Cox, James C.; Sadiraj, Vjollca; Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2014
individuals’ attitudes toward risk. It challenges the conventional view that the random lottery incentive mechanism introduces no … biases in inducing risk preferences …
Persistent link: https://www.econbiz.de/10010886962
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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 effect. Relying on a simple experiment, we...
Persistent link: https://www.econbiz.de/10010886877
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Risk Preferences may be Time Preferences: A Comment on Andreoni and Sprenger (2012)
Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2014
can allocate money between two different points of time under the condition of risk. A&S claim that their results refute …
Persistent link: https://www.econbiz.de/10010886922
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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 … (a) their within-subject stability over time (one year) and (b) their correlation with actual risk-taking behaviour in … correlations with a Big Five personality measure and is correlated with actual risk-taking behaviour. The results suggest that the …
Persistent link: https://www.econbiz.de/10010886955
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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
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An experimental investigation of the disparity between WTA and WTP for lotteries
Schmidt, Ulrich; Traub, Stefan - Institut für Weltwirtschaft (IfW) - 2009
may lead to contradictory results. The disparity is significantly reduced when background risk is introduced. That is …
Persistent link: https://www.econbiz.de/10010956013
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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 aversion and incentive effects, 2002). The authors find evidence …
Persistent link: https://www.econbiz.de/10010956059
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One Step at a Time: Do Threshold Patterns Matter in Public Good Provision?
Asher, Sam; Casaburi, Lorenzo; Nikolov, Plamen; Ye, Maoliang - Institut für Weltwirtschaft (IfW) - 2009
There is a substantial literature examining coordination in public goods games. We conducted an experiment to explore how varying patterns of thresholds affect the willingness of subjects to contribute to a public good. We had subjects play a multiperiod game where each subject was allocated an...
Persistent link: https://www.econbiz.de/10005083351
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Explaining the harmonic sequence paradox
Schmidt, Ulrich; Zimper, Alexander - Institut für Weltwirtschaft (IfW) - 2011
According to the harmonic sequence paradox (Blavatskyy 2006), an expected utility decision maker's willingness-to-pay for a gamble whose expected payoffs evolve according to the harmonic series is finite if and only if his marginal utility of additional income becomes zero for rather low payoff...
Persistent link: https://www.econbiz.de/10009216280
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Pricing risk and ambiguity: The effect of perspective taking
Trautmann, Stefan T.; Schmidt, Ulrich - Institut für Weltwirtschaft (IfW) - 2011
of literature shows that people are typically ambiguity averse, i.e. they prefer lotteries with known probabilities over … the WTP-WTA disparity and ambiguity aversion …
Persistent link: https://www.econbiz.de/10009276732