Randomization devices and the elicitation of ambiguity-averse preferences

Sophie Bade

Journal of Economic Theory, 2015, vol. 159, issue PA, 221-235

Abstract: In random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment. Agents are assumed to act as if they faced each problem on its own. While this approach is valid when agents are expected utility maximizers, ambiguity-averse agents may use the randomization device to hedge and thereby contaminate the data.

Keywords: Random incentive mechanisms; Ambiguity aversion; Experiments; Hedging (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:159:y:2015:i:pa:p:221-235

DOI: 10.1016/j.jet.2015.05.017

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