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Cox, James C.
Sadiraj, Vjollca
Schmidt, Ulrich
Year of Publication: 
Series/Report no.: 
Kiel Working Paper 1932
Most experiments on decision theory ask individual subjects to make more than one decision. The isolation hypothesis is commonly used to justify the choice of the random lottery incentive mechanism as the preferred payoff protocol. This research note reports on the main findings on the theoretical and empirical performance of different payoff mechanisms on eliciting individuals' attitudes toward risk. It challenges the conventional view that the random lottery incentive mechanism introduces no biases in inducing risk preferences.
Document Type: 
Working Paper

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