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Title:Negative recency, randomization device choice, and reduction of compound lotteries PDF Logo
Authors:Kaivanto, Kim
Kroll, Eike Benjamin
Issue Date:2011
Series/Report no.:Working paper series in economics 22
Abstract:We report an experiment in which subjects are not indifferent between real-money lotteries implemented with randomization devices that are equivalent under the Reduction Axiom. Instead choice behavior is consistent with subjective distortion of conditional probability, and this persists in treatment conditions that control for (i) computational limitations and (ii) possible confounding by ratio bias.
Subjects:reduction of compound lotteries
negative recency effect
gambler's fallacy
law of small numbers
randomization devices
instruments and materials
design of experiments
St. Petersburg paradox
JEL:D81
C91
Persistent Identifier of the first edition:urn:nbn:de:swb:90-228610
Document Type:Working Paper
Appears in Collections:Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT)

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