Experimental Economics

, Volume 13, Issue 2, pp 189–205 | Cite as

My money or yours: house money payment effects

  • Larry R. Davis
  • B. Patrick Joyce
  • Matthew R. Roelofs


This paper reports the results of an experiment designed to study how subjects’ decision making may be affected by the timing of participation payments (or show-up fees). The experiment follows Davis et al. (J. Econ. 30:69–95, 2004) where subjects were asked to make a sequential purchase decision and were given the opportunity to purchase information about the value of a good prior to a decision to purchase the good itself. There, subjects purchased information less often than expected which was interpreted as risk-seeking behavior. Here, we test a payment hypothesis by varying the timing of the participation payment. Payment of a show-up fee before the decision-making stages of the experiment increases information purchase, which we interpret as an increase in risk-averse behavior.


Payment timing Information Decision uncertainty Show-up fee Participation payment 

JEL Classification

B40 C91 D80 


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Supplementary material

10683_2010_9235_MOESM1_ESM.doc (38 kb)
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Copyright information

© Economic Science Association 2010

Authors and Affiliations

  • Larry R. Davis
    • 1
  • B. Patrick Joyce
    • 1
  • Matthew R. Roelofs
    • 2
  1. 1.School of Business and EconomicsMichigan Technological UniversityHoughtonUSA
  2. 2.Department of Economics, College of Business and EconomicsWestern Washington UniversityBellinghamUSA

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