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Correlates of Multiple Switching in the Holt and Laury Procedure

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  • Sven Grüner

    (Martin Luther University Halle-Wittenberg)

Abstract

This paper addresses inconsistent choice behavior in the Holt and Laury (2002) procedure. Instead of simply dropping inconsistent subjects, we may be able to learn something from their behavior. It appears that the more the subjects assess themselves as being risk-averse, the less likely they are to violate expected utility theory. Similar patterns are found for experimental subjects with a major in economics.

Suggested Citation

  • Sven Grüner, 2017. "Correlates of Multiple Switching in the Holt and Laury Procedure," Economics Bulletin, AccessEcon, vol. 37(1), pages 297-304.
    • Handle: RePEc:ebl:ecbull:eb-16-00808
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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I1-P26.pdf
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    References listed on IDEAS

    as
    1. Jinkwon Lee, 2008. "The effect of the background risk in a simple chance improving decision model," Journal of Risk and Uncertainty, Springer, vol. 36(1), pages 19-41, February.
    2. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    3. Jacob K. Goeree & Charles A. Holt & Thomas R. Palfrey, 2016. "Quantal Response Equilibrium:A Stochastic Theory of Games," Economics Books, Princeton University Press, edition 1, number 10743.
    4. Steffen Andersen & Glenn Harrison & Morten Lau & E. Rutström, 2009. "Elicitation using multiple price list formats," Experimental Economics, Springer;Economic Science Association, vol. 12(3), pages 365-366, September.
    5. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    6. Norbert Hirschauer & Oliver Musshoff & Syster C. Maart-Noelck & Sven Gruener, 2014. "Eliciting risk attitudes -- how to avoid mean and variance bias in Holt-and-Laury lotteries," Applied Economics Letters, Taylor & Francis Journals, vol. 21(1), pages 35-38, January.
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    Cited by:

    1. John Gibson & David Johnson, 0. "Breaking Bad: When Being Disadvantaged Incentivizes (Seemingly) Risky Behavior," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 0, pages 1-28.
    2. John Gibson & David Johnson, 2021. "Breaking Bad: When Being Disadvantaged Incentivizes (Seemingly) Risky Behavior," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(1), pages 107-134, January.

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    More about this item

    Keywords

    Risk attitude; Holt and Laury procedure; inconsistent choice behavior;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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