Asymmetrically Dominated Alternatives and Random Incentive Mechanisms

This note presents an experimental study of the random lottery incentive mechanism. In the baseline treatment 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 risk behavior can be manipulated systematically. This implies that the isolation hypothesis is violated the random incentive mechanism does not elicit true preferences

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Year of publication:	2010-08
Authors:	Schmidt, Ulrich
Institutions:	Institut für Weltwirtschaft (IfW)
Subject:	Random incentive mechanism \| isolation \| asymmetrically dominated alternatives

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Extent:	application/pdf
Series:	Kiel Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	5 pages
Classification:	C91 - Laboratory, Individual Behavior ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008455539