Correcting Biases in Standard Gamble and Time Tradeoff Utilities

Sylvie M. C. van Osch, Peter Wakker, Wilbert B. van den Hout and Anne M. Stiggelbout
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Sylvie M. C. van Osch: Leiden University Medical Center, Department of Medical Decision Making, J10-S, PO Box 9600, 2300 RC Leiden, the Netherlands; phone: +31 (0)71-5264570; fax: +31 (0)71-5266838s.m.c.van_osch@lumc.nl
Anne M. Stiggelbout: Department of Medical Decision Making, Leiden University Medical Center, Leiden, the Netherlands

Medical Decision Making, 2004, vol. 24, issue 5, 511-517

Abstract: The standard gamble (SG) method and the time tradeoff (TTO) method are commonly used tomeasure utilities. However, they are distorted by biases due to loss aversion, scale compatibility, utility curvature for life duration, and probability weighting. This article applies corrections for these biases and provides new data on these biases and their corrections. The SG and TTO utilities of 6 rheumatoid arthritis health states were assessed for 45 healthy respondents. Various corrections of utilities were considered. The uncorrected TTO scores and the corrected (for utility curvature) TTO scores provided similar results. This article provides arguments suggesting that the TTO scores are biased upward rather than having balanced biases. The only downward bias in TTO scores was small and probably cannot offset the upward biases. TheTTOscores are higher than the theoretically most preferred correction of the SG, the mixed correction. These findings suggest that uncorrected SG scores, which are higher than TTO scores, are too high.

Keywords: utility assessment; bias; loss aversion; utility curvature; probability weighting (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:medema:v:24:y:2004:i:5:p:511-517

DOI: 10.1177/0272989X04268955

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