This paper reports the results of an experiment that brings together psychological measures of competence and … ambiguous lotteries in a financial decision context. The experiment can be viewed in two parts. The first part replicates an … used to explain elicited certainty equivalents in the second part of the experiment. Certainty equivalents were elicited …

consistent with the rationality criterion. In contrast, Chapters 3, 4 and 5 take a behavioral approach to decisions under … assumptions of expected utility theory and the basic rationality requirement of consistency with first-order stochastic dominance … by a systematic bias instead of a private information advantage. Contradicting the rationality postulate and ruled out …