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 |
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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 | |
Publication status | Published - 1 Sept 2015 |
Keywords
- Random Incentive Mechanisms
- Ambiguity Aversion
- Experiments
- Hedging