A review of the certainty effect and influence of information processing

Patrick A. Ramirez and Daniel S. Levine

No 2013-47, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This review considers two explanations for behavioral decision-making in reference to the certainty and framing effects. The findings from various paradigms such as a single questionnaire, gambles with repetition, and gambles guided by feedback are explained either by prospect theory or by expected utility theory. Finally this review attempts to account for the different findings and offers a possible explanation for the conflicting results by considering the role of experience which in turn can alter how information in processed as described by fuzzy trace theory which is a dual process theory of reasoning.

Keywords: expected utility theory; prospect theory; fuzzy trace theory; certainty effect; framing effect (search for similar items in EconPapers)
JEL-codes: A10 Y80 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cdm, nep-hpe and nep-upt
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https://www.econstor.eu/bitstream/10419/81542/1/767754093.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201347

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