Speaker: Charles D. Sprenger

Affiliation: California Institute of Technology

Location: Room 629, Level 6, Colin Clark Building (#39), UQ St Lucia Campus.

Online via Zoom: https://uqz.zoom.us/j/86028716073


The empirical observation of the common ratio effect (CRE) is often interpreted as evidence of underlying common ratio preferences (CRP). However, prior research has demonstrated that, in the presence of noise, expected utility can generate a CRE in standard paired choice tasks. We expand on that research to describe how the existence or absence of a CRE may reveal little about whether there exists an underlying CRP. We then propose an alternative approach to test for the existence of a CRP using paired valuation tasks that is robust to heterogeneity and noise. We implement this approach in an online experiment with 900 participants, and we find no evidence of a systematic CRP. To reconcile our findings with existing evidence, we present the same participants with standard paired choice tasks, and we demonstrate how appropriately chosen experimental parameters can generate a CRE even in our population that has no systematic CRP.

About the presenter's meeting

If you would like to meet with Charles Sprenger, please contact please contact Dr Zachary Breig 

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Level 6, Colin Clark Building (#39), UQ St Lucia Campus