Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45178
Authors: 
Kaivanto, Kim
Kroll, Eike Benjamin
Year of Publication: 
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: 
Document Type: 
Working Paper

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