IDEAS home Printed from https://ideas.repec.org/a/kap/compec/v41y2013i2p195-211.html
   My bibliography  Save this article

Simulation Analysis for Choice of Binary Lotteries

Author

Listed:
  • Ichiro Nishizaki
  • Tomohiro Hayashida

Abstract

In this paper, we discuss the development of a simulation system with artificial autonomous adaptive agents that select one out of a given pair of binary lotteries, as represented by probability distributions over two outcomes. The agent’s decisions are made by a learning classifier system, and after classifying the information of a given pair of binary lotteries, the agent chooses one of them. The condition part of a classifier consists of two types of conditions: the conditions identifying probabilities and payoffs of a given pair of binary lotteries, and the conditions identifying characteristics of the lotteries known by several models that describe the behavioral regularities of choices under risk. We compare the result of the simulation with that of the experiment by Selten et al. (Theory Decis 46:211–249, 1999 ), and demonstrate the similarity between them. From the similarity, we consider a mechanism of human choices under risk. Finally, we examine the possibility of controlling a subject’s preference with respect to risky events using the lottery ticket procedure in laboratory experiments. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Ichiro Nishizaki & Tomohiro Hayashida, 2013. "Simulation Analysis for Choice of Binary Lotteries," Computational Economics, Springer;Society for Computational Economics, vol. 41(2), pages 195-211, February.
    • Handle: RePEc:kap:compec:v:41:y:2013:i:2:p:195-211
    DOI: 10.1007/s10614-012-9348-5
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10614-012-9348-5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10614-012-9348-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Reinhard Selten & Abdolkarim Sadrieh & Klaus Abbink, 1999. "Money Does Not Induce Risk Neutral Behavior, but Binary Lotteries Do even Worse," Theory and Decision, Springer, vol. 46(3), pages 213-252, June.
    2. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    3. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-372, June.
    4. Walker, James M & Smith, Vernon L & Cox, James C, 1990. "Inducing Risk-Neutral Preferences: An Examination in a Controlled Market Environment," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 5-24, March.
    5. Roth, Alvin E & Murnighan, J Keith, 1982. "The Role of Information in Bargaining: An Experimental Study," Econometrica, Econometric Society, vol. 50(5), pages 1123-1142, September.
    6. Carlin, Paul S., 1992. "Violations of the reduction and independence axioms in Allais-type and common-ratio effect experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 19(2), pages 213-235, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pavlo Blavatskyy & Valentyn Panchenko & Andreas Ortmann, 2023. "How common is the common-ratio effect?," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 253-272, April.
    2. Güth, W., 1997. "Boundedly Rational Decision Emergence -A General Perspective and Some Selective Illustrations-," SFB 373 Discussion Papers 1997,29, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    3. James C. Cox & Vjollca Sadiraj, 2018. "Incentives," Experimental Economics Center Working Paper Series 2018-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    4. Macleod, W. Bentley, 1985. "A theory of conscious parallelism," European Economic Review, Elsevier, vol. 27(1), pages 25-44, February.
    5. Michael J Weir & Catherine M Ashcraft & Natallia Leuchanka Diessner & Bridie McGreavy & Emily Vogler & Todd Guilfoos, 2020. "Language effects on bargaining," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-20, March.
    6. Thomas Kourouxous & Thomas Bauer, 2019. "Violations of dominance in decision-making," Business Research, Springer;German Academic Association for Business Research, vol. 12(1), pages 209-239, April.
    7. Kaivanto, Kim & Kroll, Eike B., 2012. "Negative recency, randomization device choice, and reduction of compound lotteries," Economics Letters, Elsevier, vol. 115(2), pages 263-267.
    8. Kirchkamp, Oliver & Oechssler, Joerg & Sofianos, Andis, 2021. "The Binary Lottery Procedure does not induce risk neutrality in the Holt & Laury and Eckel & Grossman tasks," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 348-369.
    9. Pope, Robin & Selten, Reinhard, 2009. "Risk in a Simple Temporal Framework for Expected Utility Theory and for SKAT, the Stages of Knowledge Ahead Theory," Bonn Econ Discussion Papers 27/2009, University of Bonn, Bonn Graduate School of Economics (BGSE).
    10. Hong Luo & Julie Holland Mortimer, 2017. "Copyright Enforcement: Evidence from Two Field Experiments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(2), pages 499-528, June.
    11. D.J. Butler, 1990. "Experimental Techniques in Economics: Some lessons to date," Economics Discussion / Working Papers 90-22, The University of Western Australia, Department of Economics.
    12. 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.
    13. Velu, C. & Iyer, S., 2008. "The Rationality of Irrationality for Managers: Returns- Based Beliefs and the Traveller’s Dilemma," Cambridge Working Papers in Economics 0826, Faculty of Economics, University of Cambridge.
    14. Daniela Cagno & Arianna Galliera & Werner Güth & Noemi Pace, 2018. "Behavioral patterns and reduction of sub-optimality: an experimental choice analysis," Theory and Decision, Springer, vol. 85(2), pages 151-177, August.
    15. Fabio Galeotti & Maria Montero & Anders Poulsen, 2019. "Efficiency Versus Equality in Bargaining," Journal of the European Economic Association, European Economic Association, vol. 17(6), pages 1941-1970.
    16. repec:ebl:ecbull:v:4:y:2002:i:10:p:1-13 is not listed on IDEAS
    17. Harrison, Glenn W. & Martínez-Correa, Jimmy & Swarthout, J. Todd, 2013. "Inducing risk neutral preferences with binary lotteries: A reconsideration," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 145-159.
    18. Alex Lehr & Jana Vyrastekova & Agnes Akkerman & René Torenvlied, 2018. "Horizontal and vertical spillovers in wage bargaining: A theoretical framework and experimental evidence," Rationality and Society, , vol. 30(1), pages 3-53, February.
    19. Peter Wakker & Veronika Köbberling & Christiane Schwieren, 2007. "Prospect-theory’s Diminishing Sensitivity Versus Economics’ Intrinsic Utility of Money: How the Introduction of the Euro can be Used to Disentangle the Two Empirically," Theory and Decision, Springer, vol. 63(3), pages 205-231, November.
    20. Straub, Paul G. & Murnighan, J. Keith, 1995. "An experimental investigation of ultimatum games: information, fairness, expectations, and lowest acceptable offers," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 345-364, August.
    21. Ulrich Schmidt & Christian Seidl, 2014. "Reconsidering the common ratio effect: the roles of compound independence, reduction, and coalescing," Theory and Decision, Springer, vol. 77(3), pages 323-339, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:compec:v:41:y:2013:i:2:p:195-211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.