When a risky prospect is valued more than its best possible outcome
Journal Title: Judgment and Decision Making - Year 2012, Vol 7, Issue 1
Abstract
In this paper, we document a violation of normative and descriptive models of decision making under risk. In contrast to uncertainty effects found by Gneezy, List and Wu (2006), some subjects in our experiments valued lotteries more than the best possible outcome. We show that the overbidding effect is more strongly related to individuals’ competitiveness traits than comprehension of the lottery’s payoff mechanism.
Authors and Affiliations
Andreas C. Drichoutis, Rodolfo M. Nayga, Jayson L. Lusk and Panagiotis Lazaridis
Keywords
Related Articles
- EP ID EP677870
- DOI -
- Views 132
- Downloads 0
The effect of military service on soldiers’ time preferences — Evidence from Israel
The current field study compares the time preferences of young adults of similar ages but in two very different environments, one more dangerous and uncertain than the other. Soldiers, college students and a control grou...
The nonsense math effect
Mathematics is a fundamental tool of research. Although potentially applicable in every discipline, the amount of training in mathematics that students typically receive varies greatly between different disciplines. In t...
Deliberation versus automaticity in decision making: Which presentation format features facilitate automatic decision making?
The idea of automatic decision making approximating normatively optimal decisions without necessitating much cognitive effort is intriguing. Whereas recent findings support the notion that such fast, automatic processes...
Do the Right Thing: Experimental evidence that preferences for moral behavior, rather than equity or efficiency per se, drive human prosociality
Decades of experimental research show that some people forgo personal gains to benefit others in unilateral anonymous interactions. To explain these results, behavioral economists typically assume that people have social...
Interpersonal effects of expressed anger and sorrow in morally charged negotiation
The expression of emotion can play a significant role in strategic decision-making. In this study, we hypothesized that emotion expression alters behavior in morally charged negotiation. We investigated the impact of fac...