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Title:Uncertainty effect revisited using physical lottery format PDF Logo
Authors:Rydval, Ondřej
Ortmann, Andreas
Prokosheva, Sasha
Hertwig, Ralph
Issue Date:2009
Series/Report no.:Jena economic research papers 2009,002
Abstract:We replicate three pricing tasks of Gneezy, List and Wu (2006) for which they document the so called uncertainty effect, namely that people value a binary lottery over non-monetary outcomes less than other people value the lottery's worse outcome. Unlike the authors who implement a verbal lottery description, we use a physical lottery format which rules out any misinterpretation of the lottery structure. Contrary to Gneezy, List and Wu, we systematically observe that subjects’ willingness to pay for the lottery is significantly higher than other subjects' willingness to pay for the lottery's worse outcome.
Subjects:Risky choice
task ambiguity
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers (2007-2014), Max-Planck-Institut für Ökonomik und Universität Jena

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