Distinguishing Common Ratio Preferences from Common Ratio Effects Using Paired Valuation Tasks
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
Abstract
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
About Centre for Unified Behavioural and Economic Sciences (CUBES) e-seminars
An online seminar series on Experimental and Behavioural Economics organized by the Centre for Unified Behavioural and Economic Sciences (CUBES) of the School of Economics at The University of Queensland.
Our seminars take place fortnightly via Zoom on Wednesdays at 10 am or 5 pm (AEST), depending on whether the guest speaker is streaming from US/Australia or Europe respectively.
Seminars consist of a 60-minute presentation followed by 15 minutes of Q&A.
Local time for seminars
You can check the corresponding times for your own time zone using the following links for each session: 10am, 5pm.
How to register
Clicking the button below gives you the option to register for: (i) all seminars (ii) seminars that take place at 10am or 5pm, or (iii) individual seminars.
Email invitations with a ZOOM link to the event will be sent 48 hours before each seminar.
If you wish to attend an upcoming seminar within the 48-hour window, please drop an email to Lionel Page.
