A Microeconometric Test of Alternative Stochastic Theories of Risky Choice

Graham Loomes (), Peter Moffatt and Robert Sugden

Journal of Risk and Uncertainty, 2002, vol. 24, issue 2, 103-30

Abstract: The random preference, Fechner (or "white noise"), and constant error (or "tremble") models of stochastic choice under risk are compared. Various combinations of these approaches are used with expected utility and rank-dependent theory. The resulting models are estimated in a random effects framework using experimental data from two samples of 46 subjects who each faced 90 pairwise choice problems. The best fitting model uses the random preference approach with a tremble mechanism, in conjunction with rank-dependent theory. As subjects gain experience, trembles become less frequent and there is less deviation from behaviour consistent with expected utility theory. Copyright 2002 by Kluwer Academic Publishers

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (132)

Downloads: (external link)
http://journals.kluweronline.com/issn/0895-5646/contents link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A Microeconometric Test of Alternative Stochastic Theories of Risky Choice (1998)
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:kap:jrisku:v:24:y:2002:i:2:p:103-30

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11166/PS2

Access Statistics for this article

Journal of Risk and Uncertainty is currently edited by W. Kip Viscusi

More articles in Journal of Risk and Uncertainty from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().