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Random Lottery Incentive Mechanism in Dynamic Choice Experiments

Author

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  • Maria J. Ruiz Martos

    (Department of Economic Theory and Economic History, University of Granada.)

Abstract

Cubitt, Starmer and Sugden [TheEconomic Journal, 108, 1362-80, (1998)] pose a dynamic choice argument against the random lottery incentive (RLIS) mechanism. To wit, the RLIS relies on principles of dynamic choice. Thus, experimental research on the dynamic choice principles should be conducted ina single choice design. This study attempts to evaluate the empirical validity of their argument by quasi-replicating their single choice experiment in a RLIS design. Results suggest that one may use the RLISin dynamic choice experiments.

Suggested Citation

  • Maria J. Ruiz Martos, 2017. "Random Lottery Incentive Mechanism in Dynamic Choice Experiments," ThE Papers 17/02, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:17/02
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers17_02.pdf
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    References listed on IDEAS

    as
    1. McClennen,Edward F., 1990. "Rationality and Dynamic Choice," Cambridge Books, Cambridge University Press, number 9780521360470.
    2. Nathalie Etchart-Vincent, 2002. "Adequate Moods for non-EU Decision Making in a Sequential Framework," Post-Print halshs-00004830, HAL.
    3. Joseph Johnson & Jerome Busemeyer, 2001. "Multiple-Stage Decision-Making: The Effect of Planning Horizon Length on Dynamic Consistency," Theory and Decision, Springer, vol. 51(2), pages 217-246, December.
    4. Cubitt, Robin P & Starmer, Chris & Sugden, Robert, 1998. "Dynamic Choice and the Common Ratio Effect: An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 108(450), pages 1362-1380, September.
    5. Cubitt, Robin P, 1996. "Rational Dynamic Choice and Expected Utility Theory," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 1-19, January.
    6. Sarin, Rakesh & Wakker, Peter P, 1998. "Dynamic Choice and NonExpected Utility," Journal of Risk and Uncertainty, Springer, vol. 17(2), pages 87-119, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    experiments; payment approaches; non-expected utility and risk; dynamic choice principles;
    All these keywords.

    JEL classification:

    • B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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