Valuing a Risky Prospect Less than its Worst Outcome: Uncertainty Effect or Task Ambiguity?

Ortmann, Andreas; Prokosheva, Alexandra; Rydval, Ondrej; Hertwig, Ralph

doi:10.2139/ssrn.1021188

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Valuing a Risky Prospect Less than its Worst Outcome: Uncertainty Effect or Task Ambiguity?

Jena Economic Research Paper No. 2007-038

CERGE-EI Working Paper No. 334

11 Pages Posted: 18 Oct 2007

See all articles by Andreas Ortmann

Andreas Ortmann

UNSW Australia Business School, School of Economics

Ondrej Rydval

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences; Max Planck Institute of Economics

Ralph Hertwig

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Human Development

There are 2 versions of this paper

Date Written: July 12, 2007

Abstract

Gneezy, List and Wu [Q. J. Econ. 121 (2006) 1283-1309] document that lotteries are often valued less than the lotteries' worst outcomes. We show how to undo this result.

Keywords: risky choice, framing, experiments, task ambiguity, subject confusion

JEL Classification: C81, C91, C93, D83

Suggested Citation: Suggested Citation

Ortmann, Andreas and Prokosheva, Alexandra and Rydval, Ondrej and Hertwig, Ralph, Valuing a Risky Prospect Less than its Worst Outcome: Uncertainty Effect or Task Ambiguity? (July 12, 2007). Jena Economic Research Paper No. 2007-038, CERGE-EI Working Paper No. 334, Available at SSRN: https://ssrn.com/abstract=1021188 or http://dx.doi.org/10.2139/ssrn.1021188