On the Experimental Robustness of the Allais Paradox

Pavlo Blavatskyy, Andreas Ortmann and Valentyn Panchenko

American Economic Journal: Microeconomics, 2022, vol. 14, issue 1, 143-63

Abstract: The Allais Paradox, or the common consequence effect, is a well-known behavioral regularity in individual decision-making under risk. Data from 81 experiments reported in 29 studies reveal that the Allais Paradox is a fragile empirical finding. The Allais Paradox is likely to be observed in experiments with high hypothetical payoffs, the medium outcome being close to the highest outcome and when lotteries are presented as a probability distribution (not in a compound form). The Allais Paradox is likely to be reversed in experiments when the probability mass is equally split between the lowest and highest outcomes in risky lotteries.

JEL-codes: D44 D81 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20190153 (application/pdf)
https://doi.org/10.3886/E119324V2 (text/html)
https://www.aeaweb.org/doi/10.1257/mic.20190153.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmic:v:14:y:2022:i:1:p:143-63

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/mic.20190153

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().