Loss Aversion for time: An experimental investigation of time preferences

This paper investigates decisions about inter-temporal tradeoffs. The objective of the study is to explore the valuation of time itself without tradeoffs between time and consequences. In an experimental study subjects made decisions about waiting time, where the time was subject to risk. We find that subjects are risk-seeking for decisions about time, which leads to the conclusion that waiting time is experienced as a loss. Subjects in this experiment show similar choice patters as can be seen in studies about money when losses are involved.

The Relevance of Irrelevant Alternatives: An experimental investigation of risky choices

Experimental economists have discovered various violations of expected utility theory and offered alternative models that can explain laboratory results. This study discovers a new violation in risky choices that cannot be explained by theories like Prospect Theory, Disappoint- ment or Regret Theory. In an experimental setting using a between- subject design, the influence of a dominated alternative on certainty equivalents is shown. One group of subjects was offered a series of choices between a lottery ticket with a 50-50 chance of winning and a sure payoff. A second group was offered the same choice plus a third alternative, that as it turned out was not chosen by any participant. As a result, the average chosen sure payoff in the second group was higher than in the first group. That means, by adding a dominated alternative to a choice set, the certainty equivalent of a lottery is in- creased.

The St. Petersburg Paradox despite risk-seeking preferences: An experimental study

The St. Petersburg is one of the oldest violations of expected utility theory. Thus far, explanations of the paradox aim at small probabili- ties being perceived as zero and the boundedness of utility. This paper provides experimental results showing that neither risk attitudes nor perception of small probabilities explain the paradox. We nd that even in situations where subjects are risk-seeking, the St. Petersburg Paradox exists. This indicates that the paradox lies at the very core of human decision-making processes and cannot be explained by the parameters discussed in previous research so far.

Attraction to Chance in Germany and Australia. An experimental study of cultural differences

This paper explores cultural differences in risky choices between Australian and German students. The focus is not on risk itself, but on tension which is a positive attribute of risky choices. Furthermore, the effects of real versus hypothetical payoffs are analysed. The experiment of this paper shows that in a given set of tension creating choices, Australians do choose tension more often than Germans, while Germans prefer higher tension. Additionally it is shown that real payoffs do make a difference in the data, but the real payoff even increases the effect.

Loss Aversion for time: An experimental investigation of time preferences

This paper investigates decisions about inter-temporal tradeoffs. The objective of the study is to explore the valuation of time itself without tradeoffs between time and consequences. In an experimental study subjects made decisions about waiting time, where the time was subject to risk. We find that subjects are risk-seeking for decisions about time, which leads to the conclusion that waiting time is experienced as a loss. Subjects in this experiment show similar choice patters as can be seen in studies about money when losses are involved

The St. Petersburg Paradox despite risk-seeking preferences: An experimental study

The St. Petersburg is one of the oldest violations of expected utility theory. Thus far, explanations of the paradox aim at small probabili- ties being perceived as zero and the boundedness of utility. This paper provides experimental results showing that neither risk attitudes nor perception of small probabilities explain the paradox. We find that even in situations where subjects are risk-seeking, the St. Petersburg Paradox exists. This indicates that the paradox lies at the very core of human decision-making processes and cannot be explained by the parameters discussed in previous research so far

Attraction to Chance in Germany and Australia: An experimental study of cultural differences

This paper explores cultural differences in risky choices between Australian and German students. The focus is not on risk itself, but on tension which is a positive attribute of risky choices. Furthermore, the effects of real versus hypothetical payoffs are analysed. The experiment of this paper shows that in a given set of tension creating choices, Australians do choose tension more often than Germans, while Germans prefer higher tension. Additionally it is shown that real payoffs do make a difference in the data, but the real payoff even increases the effect

The Relevance of Irrelevant Alternatives: An experimental investigation of risky choices

Experimental economists have discovered various violations of expected utility theory and offered alternative models that can explain laboratory results. This study discovers a new violation in risky choices that cannot be explained by theories like Prospect Theory, Disappoint- ment or Regret Theory. In an experimental setting using a between- subject design, the influence of a dominated alternative on certainty equivalents is shown. One group of subjects was offered a series of choices between a lottery ticket with a 50-50 chance of winning and a sure payoff. A second group was offered the same choice plus a third alternative, that as it turned out was not chosen by any participant. As a result, the average chosen sure payoff in the second group was higher than in the first group. That means, by adding a dominated alternative to a choice set, the certainty equivalent of a lottery is in- creased