Note on "Small Feedback-based Decisions and Their Limited Correspondence to Description-based Decisions"

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Note on "Small Feedback-based Decisions and Their Limited Correspondence to Description-based Decisions"

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Pavlo Blavatsky

Abstract

Barron and Erev (2003) report experimental results revealing differences in risk attitude in small feedback-based problems as opposed to conventional description-based problems. This note shows that theoretical predictions drawing on a simple decision rule, known as the heuristic of relative probability comparisons (HRPC), fit the experimental data in Barron and Erev (2003) surprisingly well: even in the choice situation where the HRPC predicts an exact indifference the actual distribution of subject responses was 49% to 51%.

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Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp218.

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Date of creation: Oct 2003
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Handle: RePEc:cer:papers:wp218

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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-02-01 (All new papers)
NEP-CBE-2004-02-01 (Cognitive & Behavioural Economics)
NEP-EXP-2004-02-01 (Experimental Economics)
NEP-MIC-2004-02-01 (Microeconomics)

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Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-24, December. [Downloadable!] (restricted)
Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March. [Downloadable!] (restricted)
Thaler, Richard H, et al, 1997. "The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 647-61, May.

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

David Perez-Castrillo & Robert F. Veszteg, 2005. "Experimental Evidence on the Multibidding Mechanism," UFAE and IAE Working Papers 638.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
Gerlinde Fellner & Matthias Sutter, 2005. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Discussion Papers on Strategic Interaction 2005-15, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
Other versions:
- Gerlinde Fellner & Matthias Sutter, 2005. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Bonn Econ Discussion Papers bgse16_2005, University of Bonn, Germany. [Downloadable!]
- Gerlinde Fellner & Matthias Sutter, 2008. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Jena Economic Research Papers in Economics 2008-004, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
- Gerlinde Fellner & Matthias Sutter, . "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Working Papers 2008-01, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
- Gerlinde Fellner & Matthias Sutter, 2008. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Department of Economics Working Papers wuwp116, Vienna University of Economics and B.A., Department of Economics. [Downloadable!]
- Gerlinde Fellner & Matthias Sutter, 2005. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Discussion Papers 171, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
Bruno S. Frey, . "Knight Fever towards an Economics of Awards," IEW - Working Papers iewwp239, Institute for Empirical Research in Economics - IEW. [Downloadable!]
Other versions:
- Bruno S. Frey, 2005. "Knight Fever: Towards an Economics of Awards," CREMA Working Paper Series 2005-12, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
- Bruno S. Frey, 2005. "Knight Fever – Towards an Economics of Awards," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
Pavlo R. Blavatskyy, . "Axiomatization of a Preference for Most Probable Winner," IEW - Working Papers iewwp230, Institute for Empirical Research in Economics - IEW. [Downloadable!]

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