Is the Allais paradox due to appeal of certainty or aversion to zero?

Incekara-Hafalir, E; Kim, E; Stecher, JD

Is the Allais paradox due to appeal of certainty or aversion to zero?

Incekara-Hafalir, E Kim, E Stecher, JD

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Publisher:: Springer
Publication Type:: Journal Article
Citation:: Experimental Economics, 2021, 24, (3), pp. 751-771
Issue Date:: 2021

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Field	Value	Language
dc.contributor.author	Incekara-Hafalir, E
dc.contributor.author	Kim, E
dc.contributor.author	Stecher, JD
dc.date.accessioned	2021-12-21T00:06:50Z
dc.date.available	2021-12-21T00:06:50Z
dc.date.issued	2021
dc.identifier.citation	Experimental Economics, 2021, 24, (3), pp. 751-771
dc.identifier.issn	1386-4157
dc.identifier.issn	1573-6938
dc.identifier.uri	http://hdl.handle.net/10453/152427
dc.description.abstract	© 2020, Economic Science Association. We provide a novel but intuitive explanation for expected utility violations found in the Allais paradox: individuals are commonly averse to receiving nothing. We call this phenomenon the zero effect. Our laboratory experiments show support for the zero effect. By contrast, the evidence for the certainty effect is weak to nonexistent.
dc.language	English
dc.publisher	Springer
dc.relation.ispartof	Experimental Economics
dc.relation.isbasedon	10.1007/s10683-020-09678-4
dc.rights	The final publication is available at Springer via http://dx.doi.org/ 10.1007/s10683-020-09678-4
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1401 Economic Theory, 1402 Applied Economics, 1505 Marketing
dc.subject.classification	Economics
dc.title	Is the Allais paradox due to appeal of certainty or aversion to zero?
dc.type	Journal Article
utslib.citation.volume	24
utslib.for	1401 Economic Theory
utslib.for	1402 Applied Economics
utslib.for	1505 Marketing
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access	*
pubs.consider-herdc	false
dc.date.updated	2021-12-21T00:06:48Z
pubs.issue	3
pubs.publication-status	Published
pubs.volume	24
utslib.citation.issue	3

Abstract:

© 2020, Economic Science Association. We provide a novel but intuitive explanation for expected utility violations found in the Allais paradox: individuals are commonly averse to receiving nothing. We call this phenomenon the zero effect. Our laboratory experiments show support for the zero effect. By contrast, the evidence for the certainty effect is weak to nonexistent.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/152427