We present a method that dynamically designs elicitation questions for estimating risk and time preference parameters. Typically these parameters are elicited by presenting decision makers with a series of static choices between alternatives, gambles, or delayed payments. The proposed method...

The silver lining effect predicts that segregating a small gain from a larger loss results in greater psychological value than does integrating them into a smaller loss. Using a generic prospect theory value function, we formalize this effect and derive conditions under which it should occur. We...

Individuals often use several different strategies such as the expected value rule, conjunctive rule, and elimination-by-aspects, to make decisions. It has been hypothesized that strategy selection is, in part, a function of (1) the ability of a strategy to produce an accurate response and (2)...

Judgments about simple gambles, such as those used in utility assessment, can generate sizable and systematic bias. After Hershey and Schoemaker (Hershey, J. C., P. J. H. Schoemaker. 1985. Probability vs. certainty equivalence methods in utility measurement: Are they equivalent? Management Sci....

This paper examines search across competing e-commerce sites. By analyzing panel data from over 10,000 Internet households and three commodity-like products (books, compact discs (CDs), and air travel services), we show that the amount of online search is actually quite limited. On average,...

How is risk-taking affected by prior gains and losses? While normative theory implores decision makers to only consider incremental outcomes, real decision makers are influenced by prior outcomes. We first consider how prior outcomes are combined with the potential payoffs offered by current...

In many business transactions, labor-management relations, international conflicts, and welfare-state reforms, bargainers hold strong entitlements that are often generated by claims that are not feasible anymore. These entitlements seem to shape negotiation behavior considerably. By using the...