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

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

Research output: Contribution to journalArticlepeer-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 languageEnglish
Pages (from-to)1-18
Number of pages18
JournalJudgment and Decision Making
Volume7
Issue number1
Publication statusPublished - 2012 Jan

Keywords

  • Competitiveness
  • Decision making under risk
  • Experiments
  • Lottery payoff comprehension

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Applied Psychology
  • Economics and Econometrics

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