When a risky prospect is valued more than its best possible outcome

Andreas C. Drichoutis; Rodolfo M. Nayga; Jayson L. Lusk; Panagiotis Lazaridis

When a risky prospect is valued more than its best possible outcome

Andreas C. Drichoutis, Rodolfo M. Nayga, Jayson L. Lusk, Panagiotis Lazaridis

Department of Food and Resource Economics

Research output: Contribution to journal › Article › peer-review

3 Citations (Scopus)

Abstract

In this paper, we document a violation of normative and descriptive models of decision making under risk. In contrast to uncertainty effects found by Gneezy, List andWu (2006), some subjects in our experiments valued lotteries more than the best possible outcome. We show that the overbidding effect is more strongly related to individuals' competitiveness traits than comprehension of the lottery's payoff mechanism.

Original language	English
Pages (from-to)	1-18
Number of pages	18
Journal	Judgment and Decision Making
Volume	7
Issue number	1
Publication status	Published - 2012 Jan

Keywords

Competitiveness
Decision making under risk
Experiments
Lottery payoff comprehension

ASJC Scopus subject areas

Decision Sciences(all)
Applied Psychology
Economics and Econometrics

Cite this

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When a risky prospect is valued more than its best possible outcome

Abstract

Keywords

ASJC Scopus subject areas

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