Experimental Elicitation of Ambiguity Attitude using the Random Incentive System
We demonstrate how the standard usage of the random incentive system in ambiguity experiments is not incentive compatible if the decision maker is ambiguity averse. We propose a slight modification of the procedure in which the randomization takes place before decisions are made and the state is realized and prove that if subjects evaluate the experimental environment in that way (first - risk, second - uncertainty), incentive compatibility may be restored.
|Date of creation:||15 Jun 2014|
|Date of revision:||21 Jul 2015|
|Contact details of provider:|| Web page: http://www.economics.ubc.ca/|
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