The random lottery incentive system is widely used in experimental economics to motivate subjects. This paper investigates its validity. It reports three experiments which compare responses given to decision tasks which are embedded in random lottery designs with responses in 'single choice'...

Using equivalent loss (the monetary loss equivalent to a proposed amenity reduction, EL) and equivalent gain (the gain equivalent to a proposed amenity increase, EG) alongside traditional welfare measures in a contingent valuation study of traffic disamenity, we report an experiment designed to...

This article reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players' pre-reflective inclinations towards the...

The common ratio effect is a well-attested violation of expected utility theory. This paper uses four principles of dynamic choice to characterize alternative theoretical strategies for explaining the effect. It reports an experiment which tests these principles and, by implication, several...

In two previously reported experiments, Graham Loomes, Chris Starmer, and Robert Sugden have found that choices are systematically nontransitive, following a pattern of 'cycling asymmetry' predicted by regret theory. However, there are other potential explanations for these observations. This...

This paper reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players’ pre-reflective inclinations towards the...

This paper reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players’ pre-reflective inclinations towards the...

We present a new theory of decision under uncertainty: third-generation prospect theory (PT3). This retains the predictive power of previous versions of prospect theory, but extends that theory by allowing reference points to be uncertain while decision weights are specified in a rank-dependent...