Preference for randomization: Empirical and experimental evidence

Arbeitspapier

We investigate violations of consequentialism in the form of the stochastic dominance property. The property is shared by many theories of choice and implies that the decision-maker prefers receiving the best outcome for sure over all lotteries that involve multiple outcomes. We run experiments to demonstrate that dominated randomization can be attractive. In treatments where decision-makers are asked to submit multiple decisions without knowing which one is relevant, many participants submit contradictory sets of decisions and thereby induce a dominated lottery between outcomes. Explicit choice of non-consequentialist randomization is observed in a separate treatment. A possible reason for the e ect is the desire to avoid having to make the decision. A large data set on (high-stake) university applications in Germany shows patterns that are consistent with a preference for randomization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2013-004

Classification and Topics

• Classification: Wirtschaft ; Microeconomic Behavior: Underlying Principles
• Subject: stochastic dominance violations ; individual decision making ; university choice ; matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dwenger, Nadja ; Kübler, Dorothea ; Weizsäcker, Georg
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/79621
• Last update: 10.03.2025, 11:43 AM CET