An Experimental Investigation of Alternatives to Expected Utility Using Pricing Data
Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative non-expected utility theories. The present paper performs a similar analysis which relies on pricing data instead of choice data. Since pricing data lead in many cases to a different ordering of lotteries than choices (e.g. the preference reversal phenomenon) our analysis may have fundamental different results than preceding investigations. We elicit three different types of pricing data: willingness-to-pay, willingness-to-accept and certainty equivalents under the Becker-DeGroot-Marschak (BDM) incentive mechanism. One of our main result shows that the comparative performance of the single theories differs significantly under these three types of pricing data.
|Date of creation:||Nov 2005|
|Contact details of provider:|| Postal: Kahlaische Strasse 10, D-07745 Jena|
Phone: +49-3641-68 65
Fax: +49-3641-68 69 90
Web page: http://www.econ.mpg.de/
More information through EDIRC
|Order Information:|| Web: http://www.econ.mpg.de/english/research/ESI/discuss.php Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrea Morone, 2007.
"Comparison of Mean-Variance Theory and Expected-Utility Theory through a Laboratory Experiment,"
0019, Dipartimento di Scienze economiche e metodi matematici - Università di Bari, revised Oct 2007.
- Andrea Morone, 2008. "Comparison of Mean-Variance Theory and Expected-Utility Theory through a Laboratory Experiment," Economics Bulletin, AccessEcon, vol. 3(40), pages 1-7.
- Andrea Morone, 2005. "Comparison of Mean-Variance Theory and Expected-Utility Theory through a Laboratory Experiment," Papers on Strategic Interaction 2005-20, Max Planck Institute of Economics, Strategic Interaction Group.
- Andrea Morone, 2004. "Comparison of Mean-Variance theory and Expected-Utility theory through a Laboratory Experiment," Experimental 0402001, EconWPA.
- Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
- John D Hey & Andrea Morone & Ulrich Schmidt, 2007.
"Noise and Bias in Eliciting Preferences,"
07/04, Department of Economics, University of York.
- Gul, Faruk, 1991. "A Theory of Disappointment Aversion," Econometrica, Econometric Society, vol. 59(3), pages 667-686, May.
- Harless, David W & Camerer, Colin F, 1994. "The Predictive Utility of Generalized Expected Utility Theories," Econometrica, Econometric Society, vol. 62(6), pages 1251-1289, November.
- Hey, John D & Orme, Chris, 1994. "Investigating Generalizations of Expected Utility Theory Using Experimental Data," Econometrica, Econometric Society, vol. 62(6), pages 1291-1326, November.
- Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
When requesting a correction, please mention this item's handle: RePEc:esi:discus:2005-28. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karin Richter)
If references are entirely missing, you can add them using this form.