Common Consequence Effects with Pricing Data
AbstractThis paper presents an experimental study analyzing common consequence effects with binary choice, willingness-to-pay (WTP), and willingness-to-accept (WTA). Consistent with previous research we do not find clearcut evidence of fanning out in the absence of certainty effects. Violation rates of EU are more pronounced for WTP and WTA than for choice data. Moreover, there is a strong tendency for violations in the direction of fanning out. Our results reinforce the significance of common consequence effects and provide support for the operation of cancellation in prospect theory
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1610.
Length: 6 pages
Date of creation: Mar 2010
Date of revision:
Common consequence effects; fanning out; WTP; WTA; cancellation;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-17 (All new papers)
- NEP-DCM-2010-04-17 (Discrete Choice Models)
- NEP-EXP-2010-04-17 (Experimental Economics)
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- James C. Cox & Vjollca Sadiraj & Ulrich Schmidt, 2011.
"Paradoxes and Mechanisms for Choice under Risk,"
Experimental Economics Center Working Paper Series
2011-07, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised May 2012.
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