We study the impact of coupling a decision maker’s lottery payoffs to those of a peer on the preferred level of risk by means of a lab experiment. Compared to the benchmark where the lotteries are paid off individually, symmetrically coupled payoffs increase the willingness to take risks,...

We report an experiment in which subjects are not indifferent between real-money lotteries implemented with randomization devices that are equivalent under the Reduction Axiom. Instead, choice behavior is consistent with subjective distortion of conditional probability, and this persists in...

In an experimental setting, subjects face a standard elicitation task for certainty equivalents. We show that when a third, objectively irrelevant, option is added to the standard task, the willingness to take risks increases.