Testing for independence while allowing for probabilistic choice

B-Tier
Journal: Journal of Risk and Uncertainty
Year: 2014
Volume: 49
Issue: 3
Pages: 189-211

Authors (2)

Graham Loomes Ganna Pogrebna (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We propose a broad framework for individual choice under risk which can accommodate many stochastic formulations of various deterministic theories. Using this framework to guide an experimental design, we show that most individuals’ departures from the independence axiom cannot be explained by adding a ‘random noise’ term to a deterministic ‘core’ theory which incorporates this axiom. We also find behaviour that cannot be explained in terms of the standard assumptions of Cumulative Prospect Theory, often invoked to account for violations of independence. Our results suggest that ‘similarity’ effects may explain the data better. Copyright The Author(s) 2014

Technical Details

RePEc Handle
repec:kap:jrisku:v:49:y:2014:i:3:p:189-211
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25