Abstract
We test whether violations of expected utility theory in an Allais-paradox environment are sensitive to monetary incentives. Like Harrison (1994), we find that violations are significantly reduced when lotteries are real rather than hypothetical.
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Burke, Gominiak, and Ohl are, respectively '96, '96, and '95 graduates of the College of the Holy Cross. Carter is Professor of Economics, College of the Holy Cross. Correspondence may be sent to Carter. The financial support of Holy Cross is gratefully acknowledged.
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Burke, M.S., Carter, J.R., Gominiak, R.D. et al. An experimental note on the allais paradox and monetary incentives. Empirical Economics 21, 617–632 (1996). https://doi.org/10.1007/BF01180705
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DOI: https://doi.org/10.1007/BF01180705