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Choice-Based Elicitation and Decomposition of Decision Weights for Gains and Losses Under Uncertainty

Abdellaoui, Mohammed; Vossman, Frank; Weber, Martin - C.E.P.R. Discussion Papers - 2003

This Paper reports the results of an experimental parameter-free elicitation and decomposition of decision weights … under uncertainty. Assuming cumulative prospect theory, utility functions were elicited for gains and losses at an … individual level using the trade-off method. Then decision weights were elicited using certainty equivalents of uncertain two …

Persistent link: https://www.econbiz.de/10005792132

Measuring Risk Attitudes in a Natural Experiment: Data from the Television Game Show LINGO

Beetsma, Roel; Schotman, Peter C - C.E.P.R. Discussion Papers - 1998

various models using transformations of the ‘true’ probabilities to decision weights. The estimated degree of risk aversion … (CRRA) and Constant Absolute Risk Aversion (CARA) utility specifications perform approximately equally well, with CARA …

Persistent link: https://www.econbiz.de/10005661826

The Origin of Utility

De Fraja, Gianni - C.E.P.R. Discussion Papers - 2006

. It then goes on to show that the standard economics problem of utility maximisation is formally equivalent to the …

Persistent link: https://www.econbiz.de/10005123507

Seemingly Irrelevant Events Affect Perceptions and Expectations - The FIFA World Cup 2006 as a Natural Experiment

Dohmen, Thomas J; Falk, Armin; Huffman, David; Sunde, Uwe - C.E.P.R. Discussion Papers - 2006

Prominent economic theories have emphasized the role of commonly held perceptions and expectations for determining macroeconomic outcomes. A key empirical question is how such collectively held beliefs are formed. We use the FIFA World Cup 2006 as a natural experiment. We provide direct evidence...

Persistent link: https://www.econbiz.de/10005791748

Central Bank Communication and Output Stabilization

Eijffinger, Sylvester C W; Hoeberichts, Marco; … - C.E.P.R. Discussion Papers - 2004

Some central banks have a reputation for being secretive. A justification for this behaviour that we find in the literature is that being transparent about operations and beliefs hinders the central bank in achieving the best outcome. In other words, a central bank needs flexibility and...

Persistent link: https://www.econbiz.de/10005124006

Expectation Shocks and Learning as Drivers of the Business Cycle

Milani, Fabio - C.E.P.R. Discussion Papers - 2010

Psychological factors, market sentiments, and shifts in beliefs are believed by many to play a nontrivial role in inducing and amplifying economic fluctuations. Yet, these forces are rarely considered in macroeconomic models. This paper provides an attempt to evaluate the empirical role of...

Persistent link: https://www.econbiz.de/10008468669

Buying Online: Sequential Decision Making by Shopbot Visitors

Dulleck, Uwe; Hackl, Franz; Weiss, Bernhard; … - C.E.P.R. Discussion Papers - 2008

In this article we propose a two stage procedure to model demand decisions by customers who are balancing several dimensions of a product. We then test our procedure by analyzing the behavior of buyers from an Austrian price comparison site. Although in such a market a consumer will typically...

Persistent link: https://www.econbiz.de/10005504575

Manipulating Reliance on Intuition Reduces Risk and Ambiguity Aversion.

Butler, Jeff; Guiso, Luigi; Jappelli, Tullio - C.E.P.R. Discussion Papers - 2013

Prior research suggests that those who rely on intuition rather than effortful reasoning when making decisions are less averse to risk and ambiguity. The evidence is largely correlational, however, leaving open the question of the direction of causality. In this paper, we present experimental...

Persistent link: https://www.econbiz.de/10011083555

A Search Model of Optimal Pricing and Production

Alpern, Steve; Snower, Dennis J. - C.E.P.R. Discussion Papers - 1988

This paper presents an overview of the application of the mathematical theory of 'high-low' search to firms' pricing and production decisions. We show how this methodology can be used to determine an optimal sequence of price-quantity decisions by a firm through time. We suppose that the firm...

Persistent link: https://www.econbiz.de/10005656333

The role of intuition and reasoning in driving aversion to risk and ambiguity

Butler, Jeff; Guiso, Luigi; Jappelli, Tullio - C.E.P.R. Discussion Papers - 2011

positively correlated. We show the common link is decision style: intuitive thinkers tolerate more risk and ambiguity than …

Persistent link: https://www.econbiz.de/10008915807