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...

Schumpeter took a great interest in actual fiscal policy, first, during ?9?8 and ?9?9 to rescue Austria’s economic position and currency in the aftermath of World War i. These reform proposals pertain to situations of extreme economic misery. For reforms of the fiscal system under normal...

The Petersburg Paradox and its solutions are formulated in a uniform arrangement centered around d'Alembert's ratio test. All its aspects are captured using three mappings, a mapping from the natural numbers to the space of the winnings, a utility function defined on the space of the winnings,...

In 1713 Nicolas Bernoulli sent to de Montmort several mathematical problems, the fifth of which was at odds with the then prevailing belief that the advantage of games of hazard follows from their expected value. In spite of the infinite expected value of this game, no gambler would venture a...

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...