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Essays on Decision Making Under Uncertainty
Prokosheva, Alexandra ; Ortmann, Andreas (advisor) ; Trautmann, Stefan (referee) ; Weitzel, Utz (referee)
This thesis examines several aspects of decision making under uncertainty. In the first chapter, coauthored with Ondrej Rydval, Andreas Ortmann, and Ralph Hertwig, we replicate three pricing tasks of Gneezy, List, and Wu (2006) for which they document the so-called uncertainty effect, namely, that people value a binary lottery over non-monetary outcomes less than other people value the lottery's worse outcome. While the authors implemented a verbal lottery description, we use a physical lottery format, which makes misinterpretation of the lottery structure highly unlikely. We also provide subjects with complete information about the goods they are to value (book gift certificates and one-year deferred payments). Contrary to Gneezy, List, and Wu (2006), we observe for all three pricing tasks that subjects' willingness to pay for the lottery is significantly higher than other subjects' willingness to pay for the lottery's worse outcome. In the second chapter, I investigate the relationship between attitudes towards ambiguity and the ability to reduce compound risks. The evidence from an experiment on adolescents shows that patterns identified in the previous literature are susceptible to experimental implementation and the characteristics of the subjects. Cognitive skills and the way...
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Essays on Decision Making Under Uncertainty
Prokosheva, Alexandra ; Ortmann, Andreas (advisor) ; Trautmann, Stefan (referee) ; Weitzel, Utz (referee)
This thesis examines several aspects of decision making under uncertainty. In the first chapter, coauthored with Ondrej Rydval, Andreas Ortmann, and Ralph Hertwig, we replicate three pricing tasks of Gneezy, List, and Wu (2006) for which they document the so-called uncertainty effect, namely, that people value a binary lottery over non-monetary outcomes less than other people value the lottery's worse outcome. While the authors implemented a verbal lottery description, we use a physical lottery format, which makes misinterpretation of the lottery structure highly unlikely. We also provide subjects with complete information about the goods they are to value (book gift certificates and one-year deferred payments). Contrary to Gneezy, List, and Wu (2006), we observe for all three pricing tasks that subjects' willingness to pay for the lottery is significantly higher than other subjects' willingness to pay for the lottery's worse outcome. In the second chapter, I investigate the relationship between attitudes towards ambiguity and the ability to reduce compound risks. The evidence from an experiment on adolescents shows that patterns identified in the previous literature are susceptible to experimental implementation and the characteristics of the subjects. Cognitive skills and the way...
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