Kiel Working Papers, Kiel Institute for World Economics
No 1646:
Asymmetrically Dominated Alternatives and Random Incentive Mechanisms
Ulrich Schmidt
Abstract: This note presents an experimental study of the random
lottery incentive mechanism. In the baseline treatment we observe risk
behavior in a given choice problem. We show that by integrating a second,
asymmetrically dominated choice problem in a random incentive mechanism
risk behavior can be manipulated systematically. This implies that the
isolation hypothesis is violated the random incentive mechanism does not
elicit true preferences
Keywords: Random incentive mechanism, isolation, asymmetrically dominated alternatives; (follow links to similar papers)
JEL-Codes: C91,; D81; (follow links to similar papers)
5 pages, August 2010
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