Probability weighting in different domains: The role of affect, fungibility, and stakes

Michal Krawczyk

Journal of Economic Psychology, 2015, vol. 51, issue C, 1-15

Abstract: This paper reports the results of a laboratory experiment in which probability weighting functions for risky gains were elicited non-parametrically in over 500 incentivized subjects. I compared probability weights for monetary rewards to two less fungible domains involving vouchers for different types of consumption, inducing stronger or weaker (positive) emotions. The level of stakes was also manipulated. I found that the probability to win monetary rewards was weighted almost linearly in the high stakes condition, the probability to win vouchers associated with stronger positive affect was underweighted and the probability to win affect-poor vouchers was strongly underweighted. Substantial underweighting also prevailed in all three domains in the low stakes condition.

Keywords: Prospect theory; Probability weighting functions; Fungibility; Affect (search for similar items in EconPapers)
JEL-codes: 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 (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167487015000835
Full text for ScienceDirect subscribers only

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:eee:joepsy:v:51:y:2015:i:c:p:1-15

DOI: 10.1016/j.joep.2015.06.006

Access Statistics for this article

Journal of Economic Psychology is currently edited by G. Antonides and D. Read

More articles in Journal of Economic Psychology from Elsevier
Bibliographic data for series maintained by Catherine Liu ().