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Experimental Evidence for Attractions to Chance

Author

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  • Wulf Albers
  • Robin Pope
  • Reinhard Selten
  • Bodo Vogt

Abstract

Divide the decision‐maker’s future into: (i) a pre‐outcome period (lasting from the decision until the outcome of that decision is known), and (ii) a sequel post‐outcome period (beginning when the outcome becomes known). Anticipated emotions in both periods may influence the decision, in particular, with regard to an outcome that matters to the person, the enjoyable tension from not yet knowing what this outcome will be. In the experiments presented, lottery choice can be explained by this attraction to chance, and cannot be explained by either convex von Neumann–Morgenstern utility, or by rank‐dependent risk‐loving weights: attraction to chance is a separate motivator.

Suggested Citation

  • Wulf Albers & Robin Pope & Reinhard Selten & Bodo Vogt, 2000. "Experimental Evidence for Attractions to Chance," German Economic Review, Verein für Socialpolitik, vol. 1(2), pages 113-130, May.
    • Handle: RePEc:bla:germec:v:1:y:2000:i:2:p:113-130
    DOI: 10.1111/1468-0475.t01-1-00007
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    References listed on IDEAS

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    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    2. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    3. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer;Economic Science Association, vol. 1(2), pages 115-131, September.
    4. Pope, Robin E., 1991. "The delusion of certainty in Savage's sure-thing principle," Journal of Economic Psychology, Elsevier, vol. 12(2), pages 209-241, June.
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    Citations

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    Cited by:

    1. Marcus Heldmann & Ralf Morgenstern & Thomas Münte & Bodo Vogt, 2009. "Is brain activity observable that leads to an evaluation of a probability of 0.5 that is different from 0.5 in binary lottery choices?," FEMM Working Papers 09003, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    2. Timm Teubner & Marc T. P. Adam & Claudia Niemeyer, 2015. "Measuring risk preferences in field experiments: Proposition of a simplified task," Economics Bulletin, AccessEcon, vol. 35(3), pages 1510-1517.
    3. Battigalli, Pierpaolo & Dufwenberg, Martin, 2009. "Dynamic psychological games," Journal of Economic Theory, Elsevier, vol. 144(1), pages 1-35, January.
    4. Heldmann, Marcus & Vogt, Bodo & Heinze, Hans-Jochen & Münte, Thomas, 2009. "Different methods to define utility functions yield different results and engage different neural processes," FEMM Working Papers 09014, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    5. Bischoff, Ivo, 2007. "Institutional choice versus communication in social dilemmas--An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 20-36, January.
    6. Fischbacher, Urs & Thöni, Christian, 2008. "Excess entry in an experimental winner-take-all market," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 150-163, July.
    7. von Hagen, Jürgen & Kube, Sebastian & Selten, Reinhard & Pope, Robin, 2006. "Experimental Evidence on the Benefits of Eliminating Exchange Rate Uncertainties and Why Expected Utility Theory causes Economists to Miss Them," Bonn Econ Discussion Papers 28/2006, University of Bonn, Bonn Graduate School of Economics (BGSE).
    8. Pablo Brañas-Garza, 2006. "Why gender based game theory?," ThE Papers 06/08, Department of Economic Theory and Economic History of the University of Granada..
    9. Pablo Brañas Garza & Francisca Jiménez Jiménez & Antonio Morales, 2004. "Strategic Uncertainty and Risk Attitudes:"The Experimental Connection"," Economic Working Papers at Centro de Estudios Andaluces E2004/12, Centro de Estudios Andaluces.
    10. Kjell Hausken, 2007. "Book Review," Theory and Decision, Springer, vol. 62(3), pages 303-309, May.
    11. Pope, Robin & Leitner, Johannes & Leopold-Wildburger, Ulrike, 2009. "Expected utility versus the changes in knowledge ahead," European Journal of Operational Research, Elsevier, vol. 199(3), pages 892-901, December.
    12. Heufer, Jan, 2013. "Quasiconcave preferences on the probability simplex: A nonparametric analysis," Mathematical Social Sciences, Elsevier, vol. 65(1), pages 21-30.
    13. Pope, Robin, 2004. "Biases from omitted risk effects in standard gamble utilities," Journal of Health Economics, Elsevier, vol. 23(4), pages 695-735, July.

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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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