A shocking experiment: New evidence on probability weighting and common ratio violations

Journal Title: Judgment and Decision Making - Year 2007, Vol 2, Issue 4

Abstract

We study whether probability weighting is observed when individuals are presented with a series of choices between lotteries consisting of real non-monetary adverse outcomes, electric shocks. Our estimation of the parameters of the probability weighting function proposed by Tversky and Kahneman (1992) are similar to those obtained in previous studies of lottery choice for negative monetary payoffs and negative hypothetical payoffs. In addition, common ratio violations in choice behavior are widespread. Our results provide evidence that probability weighting is a general phenomenon, independent of the source of disutility.

Authors and Affiliations

Gregory S. Berns, C. Monica Capra, Sara Moore and Charles Noussair

Keywords

Related Articles

A study of fairness judgments in China, Switzerland and Canada: Do culture, being a student, and gender matter?

This study compares judgments of the fairness of economic actions among survey populations in Switzerland, and both student and non-student groups in the People’s Republic of China, with the earlier Kahneman, Knetsch and...

Deception and price in a market with asymmetric information

In markets with asymmetric information, only sellers have knowledge about the quality of goods. Sellers may of course make a declaration of the quality, but unless there are sanctions imposed on false declarations or rep...

Coherence and correspondence in engineering design: informing the conversation and connecting with judgment and decision-making research

I show how the coherence/correspondence distinction can inform the conversation about decision methods for engineering design. Some engineers argue for the application of multi-attribute utility theory while others argue...

When uncertainty meets life: The effect of animacy on probability expression

Everyone faces uncertainty on a daily basis. Two kinds of probability expressions, verbal and numerical, have been used to characterize the uncertainty that we face. Because our cognitive concept of living things differs...

Using inferred probabilities to measure the accuracy of imprecise forecasts

Research on forecasting is effectively limited to forecasts that are expressed with clarity; which is to say that the forecasted event must be sufficiently well-defined so that it can be clearly resolved whether or not t...

Download PDF file
  • EP ID EP677582
  • DOI -
  • Views 195
  • Downloads 0

How To Cite

Gregory S. Berns, C. Monica Capra, Sara Moore and Charles Noussair (2007). A shocking experiment: New evidence on probability weighting and common ratio violations. Judgment and Decision Making, 2(4), -. https://europub.co.uk/articles/-A-677582