Retesting the Uncertainty Effect Using Lotteries with Real Products and Money
12 Pages Posted: 8 May 2013
Date Written: May 2013
In the current study, several experiments re‐examine the uncertainty effect using lotteries that include real products, monetary outcomes and electronic gift cards in a between‐subjects design. The study also takes the selling position into consideration, in addition to the buying position considered by all previous works on the uncertainty effect. The results indicate that for all types of lotteries, the bids are higher than the bids for the worst possible realization. These findings are consistent with the internality axiom and do not support the uncertainty effect.
Keywords: auction, lotteries, real products, uncertainty effect, WTA, WTP
JEL Classification: C91, D44, D81
Suggested Citation: Suggested Citation