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Pay all subjects or pay only some? An experiment on decision-making under risk and ambiguity

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  • Aydogan, Ilke
  • Berger, Loïc
  • Théroude, Vincent

Abstract

We investigate the validity of a double random incentive system where only a subset of subjects is paid for one of their choices. By focusing on individual decision-making under risk and ambiguity, we show that using either a standard random incentive system, where all subjects are paid, or a double random system, where only 10% of subjects are paid, yields similar preference elicitation results. These findings suggest that adopting a double random incentive system could significantly reduce experimental costs and logistic efforts, thereby facilitating the exploration of individual decision-making in larger-scale and higher-stakes experiments.

Suggested Citation

  • Aydogan, Ilke & Berger, Loïc & Théroude, Vincent, 2024. "Pay all subjects or pay only some? An experiment on decision-making under risk and ambiguity," Journal of Economic Psychology, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:joepsy:v:104:y:2024:i:c:s0167487024000655
    DOI: 10.1016/j.joep.2024.102757
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    More about this item

    Keywords

    Experimental methodology; Payment methods; Incentives; Ambiguity elicitation;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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