When Allais meets Ulysses: Dynamic Consistency and the Certainty Effect
We report experimental findings about subjects’ behavior in dynamic decision problems involving multistage lotteries with different timings of resolution of uncertainty. Our within subject design allows us to study violations of the independence axiom in the light of the dynamic axioms' ones : dynamic consistency, consequentialism and reduction of compound lotteries.
|Date of creation:||Dec 2009|
|Date of revision:||Sep 2012|
|Contact details of provider:|| Postal: Avenue Raymond Dugrand, CS 79606, 34960 Montpellier Cedex 2|
Web page: http://www.lameta.univ-montp1.fr/
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- Volij, Oscar, 1994. "Dynamic Consistency, Consequentialism and The Reduction of Compound Lotteries," Staff General Research Papers Archive 10569, Iowa State University, Department of Economics.
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- Cubitt, Robin P & Starmer, Chris & Sugden, Robert, 1998. "Dynamic Choice and the Common Ratio Effect: An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 108(450), pages 1362-1380, September.
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Econometric Society, vol. 47(2), pages 263-291, March.
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- Uzi Segal, 1989.
"Two-Stage Lotteries Without the Reduction Axiom,"
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552, UCLA Department of Economics.
- Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-1668, December.
- Beattie, Jane & Loomes, Graham, 1997. "The Impact of Incentives upon Risky Choice Experiments," Journal of Risk and Uncertainty, Springer, vol. 14(2), pages 155-168, March.
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