Framing and repetition effects on risky choices: A behavioural approach

Noemí Herranz-Zarzoso, Gerardo Sabater-Grande and Ainhoa Jaramillo-Gutiérrez

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 84, issue C

Abstract: Framing effects play an important role in individual decision-making under risk. This investigation revisits framing effects caused by two versions of the choice list procedure, lottery vs. lottery (LL) and lottery vs. certainty (LC). In the first, subjects face pairwise choices between lotteries within a choice list. In the second, subjects face pairwise choices between a safe amount and a lottery. In order to measure the sensitivity of subjects’ choices to the structure of the tasks, we implement an incentive-compatible experiment using repetition in order to have a robust measure of the subjects’ propensity to make a choice. Particularly, it is tested whether variations in the number of options offered in a choice list with and without variations in the range of options affect subjects’ choices. Our results suggest that changes in framework disturb subjects’ risk preferences only in the LC version when the range of options presented has been varied.

Keywords: Risk aversion; Framing effects; Risk task repetition; Choice list procedure (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:84:y:2020:i:c:s221480431830507x

DOI: 10.1016/j.socec.2019.101504

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