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A shocking experiment: New evidence on probability weighting and common ratio violations

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Author Info
Gregory S. Berns
C. Monica Capra
Sara Moore
Charles Noussair

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Abstract

We study whether probability weighting is observed when individuals are presented with a series of choices between lotteries consisting of real non-monetary adverse outcomes, electric shocks. Our estimation of the parameters of the probability weighting function proposed by Tversky and Kahneman (1992) are similar to those obtained in previous studies of lottery choice for negative monetary payoffs and negative hypothetical payoffs. In addition, common ratio violations in choice behavior are widespread. Our results provide evidence that probability weighting is a general phenomenon, independent of the source of disutility.

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Publisher Info
Article provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.

Volume (Year): 2 (2007)
Issue (Month): (August)
Pages: 234-242
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Handle: RePEc:jdm:journl:v:2:y:2007:i::p:234-242

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Related research
Keywords: individual choice experiments; choice under risk; non-monetary losses; probability weighting function.;

References listed on IDEAS
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  11. Charles Mason & Jason Shogren & Chad Settle & John List, 2005. "Investigating Risky Choices Over Losses Using Experimental Data," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 187-215, September. [Downloadable!] (restricted)
  12. Camerer, Colin F & Ho, Teck-Hua, 1994. "Violations of the Betweenness Axiom and Nonlinearity in Probability," Journal of Risk and Uncertainty, Springer, vol. 8(2), pages 167-96, March.
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