An Experimental Investigation of Alternatives to Expected Utility Using Pricing Data

Arbeitspapier

Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative nonexpected utility theories. The present paper performs a similar analysis which relies on pricing data instead of choice data. Since pricing data lead in many cases to a different ordering of lotteries than choices (e.g. the preference reversal phenomenon) our analysis may have fundamental different results than preceding investigations. We elicit three different types of pricing data: willingness-to-pay, willingness-to-accept and certainty equivalents under the Becker-DeGroot-Marschak (BDM) incentive mechanism. One of our main result shows that the comparative performance of the single theories differs significanntly under these three types of pricing data.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeitrag ; No. 280

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: expected utility ; non-expected utility ; experiments ; WTP ; WTA ; BDM ; Erwartungsnutzen ; Entscheidung bei Risiko ; Experiment ; Willingness to pay ; Verhaltensökonomik ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schmidt, Ulrich ; Morone, Andrea
• Event: Veröffentlichung
• (who): Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/22392
• Last update: 10.03.2025, 11:41 AM CET