Randomization Devices and the Elicitation of Ambiguity-Averse Preferences

Sophie Bade

doi:10.1016/j.jet.2015.05.017

Randomization Devices and the Elicitation of Ambiguity-Averse Preferences

Sophie Bade

Research output: Contribution to journal › Article › peer-review

122 Downloads (Pure)

Abstract

In random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment. Agents are assumed to act as if they faced each problem on its own. While this approach is valid when agents are expected utility maximizers, ambiguity-averse agents may use the randomization device to hedge and thereby contaminate the data.

Original language	English
Pages (from-to)	221–235
Number of pages	15
Journal	Journal of Economic Theory
Volume	159
Issue number	Part A
Early online date	4 Jun 2015
DOIs	https://doi.org/10.1016/j.jet.2015.05.017
Publication status	Published - 1 Sept 2015

Keywords

Random Incentive Mechanisms
Ambiguity Aversion
Experiments
Hedging

Access to Document

10.1016/j.jet.2015.05.017

RandInc4Accepted author manuscript, 341 KB

http://www.sciencedirect.com/science/article/pii/S0022053115001052

Cite this

@article{d900093d79df47d595b493b19547cb38,

title = "Randomization Devices and the Elicitation of Ambiguity-Averse Preferences",

abstract = "In random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment. Agents are assumed to act as if they faced each problem on its own. While this approach is valid when agents are expected utility maximizers, ambiguity-averse agents may use the randomization device to hedge and thereby contaminate the data.",

keywords = "Random Incentive Mechanisms, Ambiguity Aversion , Experiments, Hedging",

author = "Sophie Bade",

year = "2015",

month = sep,

day = "1",

doi = "10.1016/j.jet.2015.05.017",

language = "English",

volume = "159",

pages = "221–235",

journal = "Journal of Economic Theory",

issn = "0022-0531",

publisher = "Academic Press Inc.",

number = "Part A",

}

TY - JOUR

T1 - Randomization Devices and the Elicitation of Ambiguity-Averse Preferences

AU - Bade, Sophie

PY - 2015/9/1

Y1 - 2015/9/1

N2 - In random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment. Agents are assumed to act as if they faced each problem on its own. While this approach is valid when agents are expected utility maximizers, ambiguity-averse agents may use the randomization device to hedge and thereby contaminate the data.

AB - In random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment. Agents are assumed to act as if they faced each problem on its own. While this approach is valid when agents are expected utility maximizers, ambiguity-averse agents may use the randomization device to hedge and thereby contaminate the data.

KW - Random Incentive Mechanisms

KW - Ambiguity Aversion

KW - Experiments

KW - Hedging

U2 - 10.1016/j.jet.2015.05.017

DO - 10.1016/j.jet.2015.05.017

M3 - Article

SN - 0022-0531

VL - 159

SP - 221

EP - 235

JO - Journal of Economic Theory

JF - Journal of Economic Theory

IS - Part A

ER -