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Sequential Common Consequence Effect and Incentives

Maria J. Ruiz Martos ()
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Maria J. Ruiz Martos: Department of Economic Theory and Economic History, University of Granada.

Authors registered in the RePEc Author Service: Maria Jose Ruiz-Martos ()

No 18/04, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: Economics calls for monetary incentives to induce participants to exhibit truthful behaviour. This experiment investigates the effect of reducing incentives on dynamic choices, which encompass the individual and chance in a sequence of decisions. This experiment compares choices with the commonly used random lottery incentive system (RLIS) to hypothetical choices in the dynamic choice setting surrounding the common consequence effect (CCE), both horizontal and vertical. In addition, the RLIS is partially controlled for by eliciting with single choice individual preferences over the two horizontal CCE static choice problems. Results suggest that lessening incentives do not induce a systematic shift in preferences when emotional responses are not at stake.

Keywords: experiments; monetary incentives; non-expected utility and risk; dynamic choice principles; common consequence effect (search for similar items in EconPapers)
JEL-codes: B49 C91 D11 D81 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2018-07-01
New Economics Papers: this item is included in nep-exp and nep-upt
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