We report an experiment in which subjects are not indifferent between real-money lotteries implemented with randomization devices that are equivalent under the Reduction Axiom. Instead choice behavior is consistent with subjective distortion of conditional probability, and this persists in...

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence...

In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al., 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating...

In this study, we experimentally analyze the investment behavior of smallholder farmers in Uganda. We consider a problem of optimal stopping, stylizing an option to invest in a project. We ascertain whether, and to what extent, the real options approach and the classical investment theory can...

Kazakhstan and Germany have different development levels of the agricultural sectors. One of the explanations for this fact might be the different investment behavior of farmers in the two countries. We experimentally analyze whether the investment behavior of farmers is consistent with the...

This paper examines the influence of pre-experiment tasks on subject understanding. It used a 2x2 design varying the type of instructions and whether or not the pre-experiment quiz was incentivized. The Standard instructions were written closely replicate instructions used in prior economics...

In laboratory experiments we explore the effects of communication and group decision making on investment behavior and on subjects' proneness to behavioral biases. Most importantly, we show that communication and group decision making does not impact subjects' overall proneness to biases like...

We report an experimental test of the influence of ambiguity on behaviour in a coordination game. We study the behaviour of subjects in the presence of ambiguity and attempt to determine whether they prefer to choose an ambiguity safe option. We fi?nd that this strategy, which is not played in...

In experimental investigations of the effect of real incentives, accountability—the implicit or explicit expectation of a decision maker that she may have to justify her decisions in front of somebody else—is often confounded with the incentives themselves. This confounding of accountability...

Experimental economics methods were used to assess public understanding of information in weather forecasts and test whether the participants were able to make better decisions using the probabilistic information presented in table or bar graph formats than if they are presented with a...