Common consequence effects with pricing data

Ulrich Schmidt and Stefan Trautmann

No 1610, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper presents an experimental study analyzing common consequence effects with binary choice, willingness-to-pay (WTP), and willingness-to-accept (WTA). Consistent with previous research we do not find clearcut evidence of fanning out in the absence of certainty effects. Violation rates of EU are more pronounced for WTP and WTA than for choice data. Moreover, there is a strong tendency for violations in the direction of fanning out. Our results reinforce the significance of common consequence effects and provide support for the operation of cancellation in prospect theory.

Keywords: Common consequence effects; fanning out; WTP; WTA; cancellation (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1610

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