Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/98412 
Erscheinungsjahr: 
2014
Schriftenreihe/Nr.: 
Kiel Working Paper No. 1930
Verlag: 
Kiel Institute for the World Economy (IfW), Kiel
Zusammenfassung: 
Common ratio effects should be ruled out if subjects' preferences satisfy compound independence, reduction of compound lotteries, and coalescing. In other words, at least one of these axioms should be violated in order to generate a common ratio effect. Relying on a simple experiment, we investigate which failure of these axioms is concomitant with the empirical observation of common ratio effects.We observe that compound independence and reduction of compound lotteries hold, whereas coalescing is systematically violated. This result provides support for theories which explain the common ratio effect by violations of coalescing (i.e., configural weight theory) instead of violations of compound independence (i.e., rank-dependent utility or cumulative prospect theory).
Schlagwörter: 
common ratio effect
coalescing
reduction
compound independence
event splitting
branch splitting
isolation effect
Allais paradox
JEL: 
C91
C44
D81
Dokumentart: 
Working Paper

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