This chapter describes the lottery procedure for inducing preferences over units of experimental exchange and show how it is supported by several experiments on behavior in simple contexts. This chapter reviews various evidence from a set of paired choice and pricing tasks designed to determine...

A continuing goal of experiments is to understand risky decisions when the decisions are important. Often a decision's importance relates to the magnitude of the associated monetary stake. Khaneman and Tversky (1979) argue that risky decisions in high stakes environments can be informed using...