Kiel Working Papers, Kiel Institute for World Economics
No 1610:
Common Consequence Effects with Pricing Data
Ulrich Schmidt and Stefan T. Trautmann
Abstract: This paper presents an experimental study analyzing common
consequence effects with binary choice, willingness-to-pay (WTP), and
willingness-to-accept (WTA). Consistent with previous research we do not
find clearcut evidence of fanning out in the absence of certainty effects.
Violation rates of EU are more pronounced for WTP and WTA than for choice
data. Moreover, there is a strong tendency for violations in the direction
of fanning out. Our results reinforce the significance of common
consequence effects and provide support for the operation of cancellation
in prospect theory
Keywords: Common consequence effects, fanning out, WTP, WTA, cancellation; (follow links to similar papers)
JEL-Codes: C91,; D81; (follow links to similar papers)
6 pages, March 2010
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