Why are lotteries valued less? Multiple tests of a direct risk-aversion mechanism

Judgment and Decision Making

Volumn 7, Issue 1, 2012, Pages 19-24

  Newman, George E ^a   Mochon, Daniel ^b  

^a YALE UNIVERSITY   (United States)

^b TULANE UNIVERSITY   (United States)

Author keywords

Lottery; Risk aversion; Uncertainty effect

Indexed keywords

EID: 84856670619     PISSN: None     EISSN: 19302975     Source Type: Journal    
DOI: None     Document Type: Article

References (15)

1. Bell, D. E. (1985). Disappointment in decision making under uncertainty. Operations Research, 33, 1-27.
2. Diecidue, E., Schmidt, U., & Wakker, P. P. (2004). The utility of gambling reconsidered. The Journal of Risk and Uncertainty, 29, 241-259.
3. Ellison, C. G., & McFarland, M. J. (2011). Religion and gambling among U.S. adults: Exploring the role of traditions, beliefs, practices, and networks. Journal for the Scientific Study of Religion, 50, 82-102.
4. Ellsberg, D. (1961). Risk, ambiguity, and the Savage axioms. The Quarterly Journal of Economics, 75, 643-669.
5. Gneezy, U., List, J. A., & Wu, G. (2006). The uncertainty effect: When a risky prospect is valued less than its worst outcome. Quarterly Journal of Economics, 121, 1283-1309.
6. Haisley, E., Mostafa, R., & Loewenstein, G. (2008). Subjective relative income and lottery ticket purchases. Journal of Behavioral Decision Making, 21, 283-295.
7. Keren, G., & Willemsen, M. C. (2008). Decision anomalies, experimenter assumptions, and participants' comprehension: Reevaluating the uncertainty effect. Journal of Behavioral Decision Making, 22, 301-317.
8. Loomes, G., & Sugden, R. (1986). Disappointment and dynamic consistency in choice under uncertainty. The Review of Economic Studies, 53, 271-282.
9. Machina, M. J. (1987). Choice under uncertainty: Problems solved and unsolved. Journal of Economic Perspectives, 1, 121-154.
10. Mellers, B. A. (2000). Choice and the relative pleasure of consequences. Psychological Bulletin, 126, 910-924.
11. Mellers, B. A., & McGraw, P. (2001). Anticipated emotions as guides to choice. Current Directions in Psychological Science, 10, 210-214.
12. Rydval, O., Ortmann, A., Prokosheva, A., & Hertwig, R. (2009). How certain is the uncertainty effect? Experimental Economics, 12, 473-487.
13. Simonsohn, U. (2009). Direct Risk Aversion: Evidence From Risky Prospects Valued Below Their Worst Outcome, Psychological Science, 20, 691-692.
14. Starmer, C. (2000). Developments in non-expected utility-theory: The hunt for a descriptive theory of choice under risk, Journal of Economic Literature, 38, 332-382.
15. Wu, G., Zhang, J., & Gonzalez, R. (2004). Decision under risk. In D. J. Koehler & N. Harvey (Eds.), Blackwell Handbook of Judgment and Decision Making, 399-423. Oxford: Blackwell.