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Negative recency, randomization device choice, and reduction of compound lotteries

  • Kaivanto, Kim
  • Kroll, Eike B.

We report an experiment in which subjects are not indifferent between real-money lotteries implemented with randomization devices that are equivalent under the Reduction Axiom. Instead, choice behavior is consistent with subjective distortion of conditional probability, and this persists in treatment conditions that control for (i) computational limitations and (ii) possible confounding by ratio bias.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 115 (2012)
Issue (Month): 2 ()
Pages: 263-267

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Handle: RePEc:eee:ecolet:v:115:y:2012:i:2:p:263-267
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. repec:dgr:kubcen:200432 is not listed on IDEAS
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