When a risky prospect is valued more than its best possible outcome
AbstractIn this paper, we document a violation of normative and descriptive models of decision making under risk. In contrast to uncertainty effects found by Gneezy, List and Wu (2006), some subjects in our experiments valued lotteries more than the best possible outcome. We show that the overbidding effect is more strongly related to individuals' competitiveness traits than comprehension of the lottery's payoff mechanism.
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Bibliographic InfoArticle provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.
Volume (Year): 7 (2012)
Issue (Month): 1 (January)
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Decision making under risk; competitiveness; lottery payoff comprehension; experiments.;
Other versions of this item:
- Andreas C. Drichoutis & Rodolfo M. Nayga, Jr. & Jayson L. Lusk & Panagiotis Lazaridis, 2009. "When a risky prospect is valued more than its best possible outcome," Working Papers 2009-12, Agricultural University of Athens, Department Of Agricultural Economics.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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