Waterfall illusion in risky choice – exposure to outcome-irrelevant gambles affects subsequent valuation of risky gambles

B-Tier
Journal: European Economic Review
Year: 2021
Volume: 139
Issue: C

Authors (2)

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

Based on recent discoveries in economics, neuroscience, and psychology, we hypothesize that pure exposure to high-payoff or low-payoff gambles can change people's subsequent reported valuations of gambles and confirm this hypothesis in a laboratory experiment. In particular, the same participants within the same experimental session provide higher valuations for the same gambles after they have been exposed to low-payoff gambles compared to after they have been exposed to high-payoff gambles. These results are consistent with the current understanding of how the nervous system encodes payoffs and imply that even brief experiences that do not change wealth can impact an individual's reported valuations of risky options.

Technical Details

RePEc Handle
repec:eee:eecrev:v:139:y:2021:i:c:s0014292121002075
Journal Field
General
Author Count
2
Added to Database
2026-01-29