All probabilities are equal, but some probabilities are more equal than others
Shlomo Naeh () and
Uzi Segal ()
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Shlomo Naeh: Hebrew University of Jerusalem
No 998, Boston College Working Papers in Economics from Boston College Department of Economics
A common procedure for selecting people is to have them draw balls from an urn in turn. Modern and ancient stories suggest that such lotteries may be viewed by the individuals as “unfair.” We compare this procedure with several alternatives. They all give individuals equal chance of being selected, but have different structures. We an- alyze these procedures as multistage lotteries. In line with previous literature, our analysis is based on the observation that multistage lotteries are not considered indifferent to their probabilistic one-stage representations. We use a non-expected utility model and show that individuals have preferences over the different procedures.
Keywords: Fair lotteries; non-expected utility; multi-stage lotteries (search for similar items in EconPapers)
JEL-codes: D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
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