Resource title

An Experimental Investigation of Alternatives to Expected Utility Using Pricing Data

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Resource description

Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative nonexpected utility theories. The present paper performs a similar analysis which relies on pricing data instead of choice data. Since pricing data lead in many cases to a different ordering of lotteries than choices (e.g. the preference reversal phenomenon) our analysis may have fundamental different results than preceding investigations. We elicit three different types of pricing data: willingness-to-pay, willingness-to-accept and certainty equivalents under the Becker-DeGroot-Marschak (BDM) incentive mechanism. One of our main result shows that the comparative performance of the single theories differs significantly under these three types of pricing data.

Resource author

Andrea Morone, Ulrich Schmidt

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22013

Resource license

Adapt according to the presented license agreement and reference the original author.