Violations of the betweenness axiom and nonlinearity in probability

@article{Camerer1994ViolationsOT,
title={Violations of the betweenness axiom and nonlinearity in probability},
author={C. Camerer and T. Ho},
journal={Journal of Risk and Uncertainty},
year={1994},
volume={8},
pages={167-196}
}

Betweenness is a weakened form of the independence axiom, stating that a probability mixture of two gambles should lie between them in preference. Betweenness is used in many generalizations of expected utility and in applications to game theory and macroeconomics. Experimental violations of betweenness are widespread. We rule out intransitivity as a source of violations and find that violations are less systematic when mixtures are presented in compound form (because the compound lottery… CONTINUE READING