In this study we examine how the introduction of a reference lottery with non-random outcomes alters the way in which choices among pairs of lotteries are made, even if it does not alter the choices. We use different domains (some of the lotteries produce gains, other losses), and different contexts (one member of the pair, the reference lottery, may be either risky or certain). In our experiment, the change from gain to loss domain affects choices: subjects are risk averse in gain domain, but not in the loss domain. On the contrary, the context effect of the certain lottery does not affect choices. But the introduction of the certainty reference lottery affects two behavioral variables, response time and brain activation, in a dramatic way. This result suggests that the certainty lottery promotes a different process through which preferences are revealed, even if the differences among lotteries may not be large enough to induce different choices.

The impact of the certainty context on the process of choice / Dickhaut, John; Pardo, Jose (corresponding author); Smith, Kip; Rustichini, Aldo; Nagode, Jennifer C.; Mccabe, Kevin. - ELETTRONICO. - (2002), pp. 1-21.

The impact of the certainty context on the process of choice

2002-01-01

Abstract

In this study we examine how the introduction of a reference lottery with non-random outcomes alters the way in which choices among pairs of lotteries are made, even if it does not alter the choices. We use different domains (some of the lotteries produce gains, other losses), and different contexts (one member of the pair, the reference lottery, may be either risky or certain). In our experiment, the change from gain to loss domain affects choices: subjects are risk averse in gain domain, but not in the loss domain. On the contrary, the context effect of the certain lottery does not affect choices. But the introduction of the certainty reference lottery affects two behavioral variables, response time and brain activation, in a dramatic way. This result suggests that the certainty lottery promotes a different process through which preferences are revealed, even if the differences among lotteries may not be large enough to induce different choices.
2002
Trento, Italia
University of Trento. Faculty of Economics. CEEL (Computable and Experimental Economics Laboratory)
The impact of the certainty context on the process of choice / Dickhaut, John; Pardo, Jose (corresponding author); Smith, Kip; Rustichini, Aldo; Nagode, Jennifer C.; Mccabe, Kevin. - ELETTRONICO. - (2002), pp. 1-21.
Dickhaut, John; Pardo, Jose (corresponding author); Smith, Kip; Rustichini, Aldo; Nagode, Jennifer C.; Mccabe, Kevin
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/358729
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