Theory and Decision

, Volume 18, Issue 2, pp 203-228

First online:

Individual behavior under risk and under uncertainty: An experimental study

  • M. CohenAffiliated withCentre de Mathématiques Economiques et d'Informatique Université Paris I
  • , J. Y. JaffrayAffiliated withLaboratoire d'Econométrie, Université Paris VI
  • , T. SaidAffiliated withDépartment de Mathématiques UER de Sc. Economiques, Université Paris XIII

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These experiments are concerned with individual behavior under risk and under uncertainty. By exploiting the ‘isolation effect’ the experiments were able to offer to 134 subjects the possibility of actually gaining or losing an important sum of money.

The experimental data show that under risk as well as under complete ignorance the subjects' attitudes towards prospects of gains and towards prospects of losses are totally unrelated.

The data also show that when facing prospects of gains, the subjects generally take the exact probabilities of the events into account, whereas, when facing prospects of losses many of then have only recourse to coarser categories of plausibility, or even no longer use their information at all.