Universität zu Köln

Glöckner, Andreas ORCID: 0000-0002-7766-4791, Renerte, Baiba ORCID: 0000-0002-2229-2150 and Schmidt, Ulrich (2020). Violations of coalescing in parametric utility measurement. Theory Decis., 89 (4). S. 471 - 502. DORDRECHT: SPRINGER. ISSN 1573-7187

Full text not available from this repository.

Abstract

The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and underweight large probabilities. A separate stream of literature has reported event-splitting effects (also called violations of coalescing) and shown that they can explain violations of expected utility. This leads to the questions whether (1) the observed shape of weighting functions is a mere consequence of the coalesced presentation and, more generally, whether (2) preference elicitation should rely on presenting lotteries in a canonical split form instead of the commonly used coalesced form. We analyze data from a binary choice experiment where all lottery pairs are presented in both split and coalesced forms. Our results show that the presentation in a split form leads to a better fit of expected utility theory and to probability weighting functions that are closer to linear. We thus provide some evidence that the extent of probability weighting is not an ingrained feature, but rather a result of processing difficulties.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Glöckner, Andreas UNSPECIFIED orcid.org/0000-0002-7766-4791 UNSPECIFIED Renerte, Baiba UNSPECIFIED orcid.org/0000-0002-2229-2150 UNSPECIFIED Schmidt, Ulrich UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-326547
DOI:	10.1007/s11238-020-09761-5
Journal or Publication Title:	Theory Decis.
Volume:	89
Number:	4
Page Range:	S. 471 - 502
Date:	2020
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-7187
Language:	English
Faculty:	Faculty of Human Sciences
Divisions:	Faculty of Human Sciences > Department Psychologie
Subjects:	Psychology
Uncontrolled Keywords:	Keywords Language CUMULATIVE PROSPECT-THEORY; INDEPENDENCE; CHOICE; DECISION; TESTS; ELICITATION; REDUCTION; PARADOXES; AVERSION; GAMBLES Multiple languages Economics; Social Sciences, Mathematical Methods Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/32654