Axiom of Monotonicity: An Experimental Test
AbstractThe Axiom of Monotonicity (AM) is a necessary condition for a number of expected utility representations, including those obtained by de Finetti (1930), von Neumann and Morgenstern (1944) and Savage (1954). The paper reports on experiments that directly test AM by eliminating strategic uncertainty, context, and peer effects. In this sterile and simple environment we do not observe AM violations under uncertainty but we do observe violations under ambiguity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22863.
Date of creation: 2010
Date of revision:
monotonicity; dominance; disjunction effect; sure thing principle;
Other versions of this item:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-04 (All new papers)
- NEP-EXP-2010-06-04 (Experimental Economics)
- NEP-UPT-2010-06-04 (Utility Models & Prospect Theory)
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