Are Event-Splitting Effects Actually Boundary Effects?

Steven J Humphrey

Journal of Risk and Uncertainty, 2001, vol. 22, issue 1, 79-93

Abstract: An event-splitting effect (ESE) occurs when an event, which yields a positive outcome in one lottery but zero under another, is separated into two sub-events and this increases the relative attractiveness of the former lottery. ESEs are attributed to either (1) a preference for more positive outcomes in lotteries, or (2) an aversion to more zero outcomes. An experiment is reported which replicates ESEs whilst controlling for explanation (2). This favours explanation (1), but a lack of generality in replication suggests previous ESEs to be partially due to (2). Implications are discussed for a related choice phenomena, decision theory, and real-world decision-making. Copyright 2001 by Kluwer Academic Publishers

Date: 2001
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