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The Impact of Incentives upon Risky Choice Experiments

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  • Beattie, Jane
  • Loomes, Graham

Abstract

Much of the evidence raising doubts about expected utility theory (EUT) comes from experiments involving hypothetical decisions. Most of the rest of the evidence comes from experiments where respondents are asked to make a large number of decisions, knowing that only one of these will provide the basis for payment. Concerns have often been expressed about the "realness" of such data, and their reliability as a basis for criticizing EUT and promoting alternative theories. The present article reviews this debate and reports new experimental results that directly address this issue. Copyright 1997 by Kluwer Academic Publishers

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  • Beattie, Jane & Loomes, Graham, 1997. "The Impact of Incentives upon Risky Choice Experiments," Journal of Risk and Uncertainty, Springer, vol. 14(2), pages 155-168, March.
    • Handle: RePEc:kap:jrisku:v:14:y:1997:i:2:p:155-68
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    References listed on IDEAS

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    5. Wilcox, Nathaniel T, 1993. "Lottery Choice: Incentives, Complexity and Decision Time," Economic Journal, Royal Economic Society, vol. 103(421), pages 1397-1417, November.
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    7. Harrison, Glenn W, 1994. "Expected Utility Theory and the Experimentalists," Empirical Economics, Springer, vol. 19(2), pages 223-253.
    8. Battalio, Raymond C & Kagel, John H & Jiranyakul, Komain, 1990. "Testing between Alternative Models of Choice under Uncertainty: Some Initial Results," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 25-50, March.
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