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A note on coupled lotteries

Author

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  • Adam, Marc T.P.
  • Kroll, Eike B.
  • Teubner, Timm

Abstract

We study the impact of coupling a decision maker’s lottery payoffs to those of a peer on the preferred level of risk by means of a lab experiment. Compared to the benchmark where the lotteries are paid off individually, symmetrically coupled payoffs increase the willingness to take risks, whereas asymmetrically coupled payoffs have the opposite effect. Moreover, subjects with persistent choices in the different conditions behave more risk averse than subjects with non-persistent behavior.

Suggested Citation

  • Adam, Marc T.P. & Kroll, Eike B. & Teubner, Timm, 2014. "A note on coupled lotteries," Economics Letters, Elsevier, vol. 124(1), pages 96-99.
    • Handle: RePEc:eee:ecolet:v:124:y:2014:i:1:p:96-99
    DOI: 10.1016/j.econlet.2014.04.024
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    Cited by:

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    2. Alexia Gaudeul, 2013. "Social preferences under uncertainty," Jena Economics Research Papers 2013-024, Friedrich-Schiller-University Jena.
    3. Stefan Grimm & Martin G. Kocher & Michal Krawczyk & Fabrice Lec, 2021. "Sharing or gambling? On risk attitudes in social contexts," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1075-1104, December.
    4. Timm Teubner & Marc T. P. Adam & Claudia Niemeyer, 2015. "Measuring risk preferences in field experiments: Proposition of a simplified task," Economics Bulletin, AccessEcon, vol. 35(3), pages 1510-1517.
    5. Koch, Melanie & Menkhoff, Lukas & Schmidt, Ulrich, 2021. "Coupled lotteries—A new method to analyze inequality aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 236-256.

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    More about this item

    Keywords

    Other-regarding preferences; Decision under risk; Lottery choice;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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