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Improving one’s choices by putting oneself in others’ shoes – an experimental analysis
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Li, Zhihua, Rohde, Kirsten I. M. and Wakker, Peter P. (2018) Improving one’s choices by putting oneself in others’ shoes – an experimental analysis. Journal of Risk and Uncertainty, 54 (1). pp. 1-13. doi:10.1007/s11166-017-9253-3
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Official URL: http://doi.org/10.1007/s11166-017-9253-3
Abstract
This paper investigates how letting people predict others’ choices under risk affects subsequent own choices. We find an improvement of strong rationality (risk neutrality) for losses in own choices, but no such improvement for gains. There is no improvement of weak rationality (avoiding preference reversals). Overall, risk aversion in own choices increases. Conversely, for the effects of own choices on predicting for others, the risk aversion predicted in others’ choices is reduced if preceded by own choices, for both gains and losses. Remarkably, we find a new probability matching paradox at the group level. Relative to preceding studies on the effects of predicting others’ choices, we added real incentives, pure framing effects, and simplicity of stimuli. Our stimuli were maximally targeted towards our research questions.
| Item Type: | Journal Article | ||||||
|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HB Economic Theory | ||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||
| SWORD Depositor: | Library Publications Router | ||||||
| Library of Congress Subject Headings (LCSH): | Decision making, Risk, Uncertainty | ||||||
| Journal or Publication Title: | Journal of Risk and Uncertainty | ||||||
| Publisher: | Springer US | ||||||
| ISSN: | 1573-0476 | ||||||
| Official Date: | February 2018 | ||||||
| Dates: |
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| Date of first compliant deposit: | 31 May 2018 | ||||||
| Volume: | 54 | ||||||
| Number: | 1 | ||||||
| Page Range: | pp. 1-13 | ||||||
| DOI: | 10.1007/s11166-017-9253-3 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Open Access | ||||||
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