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Experimental Economics

, Volume 12, Issue 4, pp 473–487 | Cite as

How certain is the uncertainty effect?

  • Ondřej Rydval
  • Andreas Ortmann
  • Sasha Prokosheva
  • Ralph Hertwig
Open Access
Article

Abstract

We replicate three tasks for which Gneezy, List and Wu (Q. J. Econ. 121(4):1283–1309, 2006) document the so-called uncertainty effect: People value a binary lottery over non-monetary outcomes less than other people value the lottery’s worse outcome. While the authors implement verbal lottery descriptions, we use a physical lottery format and also provide subjects with complete information about the goods they are to value. 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.

Keywords

Decision making under risk Framing Experiments Task ambiguity 

JEL Classification

C81 C91 C93 D83 

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Copyright information

© The Author(s) 2009

Authors and Affiliations

  • Ondřej Rydval
    • 1
    • 2
  • Andreas Ortmann
    • 3
  • Sasha Prokosheva
    • 2
    • 4
  • Ralph Hertwig
    • 5
  1. 1.Max Planck Institute of EconomicsJenaGermany
  2. 2.CERGE-EIPragueCzech Republic
  3. 3.School of Economics, Australian School of BusinessUNSWSydneyAustralia
  4. 4.Universidad Carlos III de MadridMadridSpain
  5. 5.University of BaselBaselSwitzerland

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