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

Kaivanto, Kim and Kroll, Eike B. (2012) Negative recency, randomization device choice, and reduction of compound lotteries. Economics Letters, 115 (2). pp. 263-267. ISSN 0165-1765

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Abstract

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.

Item Type: Article
Journal or Publication Title: Economics Letters
Subjects: H Social Sciences > HB Economic Theory
Departments: Lancaster University Management School > Economics
ID Code: 55655
Deposited By: ep_importer_pure
Deposited On: 10 Jul 2012 11:42
Refereed?: Yes
Published?: Published
Last Modified: 09 Oct 2014 13:43
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/55655

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