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
Authors:	Schmidt, Ulrich
Publisher:	Kiel : Kiel Institute for the World Economy (IfW)
Subject:	Leistungsanreiz \| Zufallsvariable \| Risikopräferenz \| Test \| Random incentive mechanism \| isolation \| asymmetrically dominated alternatives

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Series:	Kiel Working Paper ; 1646
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	634347101 [GVK] hdl:10419/39654 [Handle] RePEc:zbw:ifwkwp:1646 [RePEc]
Classification:	C91 - Laboratory, Individual Behavior ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	EconStor

Persistent link: https://www.econbiz.de/10010278010