Asymmetrically Dominated Choice Problems and Random Incentive Mechanisms

  title={Asymmetrically Dominated Choice Problems and Random Incentive Mechanisms},
  author={P. Schmidt},
A common methodology in experimental research is the use of random incentive mechanisms. This note investigates possible distortion induced by such mechanisms in the context of choice under risk. In the baseline (one task) treatment of our experiment we observe risk behavior in a given choice problem. We show that by integrating a second, asymmetrically dominated choice problem in a random incentive mechanism behavior can be systematically manipulated. This implies that the isolation hypothesis… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.


Publications referenced by this paper.
Showing 1-10 of 23 references

The Independence Axiom and the Bipolar Behaviorist

G. W. Harrison, J. T. Swarthout
View 1 Excerpt

“ State Beliefs and Play in Normal - Form Games ”

M. A. Costa-Gomes, G. G. Weizsäcker
Review of Economic Studies • 2008

“ The Effect of the Background Risk in a Simple Chance Improving Decision Model

J. Lee
Journal of Risk and Uncertainty • 2008

“ Valuation Using Multiple Price List Formats

S. Anderson
Applied Economics • 2007

“ Pay One or Pay All : Random Selection of One Choice for Payment

S. K. Laury

“ Discovered Preferences and the Experimental Evidence of Violations of Expected Utility Theory

R. P. Cubitt, C. Starmer, R. Sugden
Journal of Economic Methodology • 2001

Risk Aversion and Incentive Effects

Charles A. Holt, Susan K. Laury
View 2 Excerpts

“ Explaining Context Effects on Choice Using a Model of Comparative Judgement

I. Bhargava, R. Srivastava
Journal of Consumer Psychology • 2000

Similar Papers

Loading similar papers…