CeDEx Brown Bag Seminar - Ash Luckman (Warwick)

This week's Brown Bag will be given by Dr Ashley Luckman, NIBS Post Doc based at the University of Warwick.

Testing preference reversals in risky choice with multiple value elicitation methods by Ashley Luckman, Andrea Isoni and Graham Loomes (Warwick Business School).

A robust finding in the risky choice literature is that people’s preferences in choices between gambles are often inconsistent with the values that they give those gambles. The classic pattern of these preference reversals is to give a higher Certainty Equivalent (CE) to a bet with a low probability of a large outcome ($-bet), than to a bet with a high probability of a small outcome (P-bet), despite preferring the P-bet to the $-bet in direct choice. However CEs are just one method for eliciting the value of a bet; the value can also be elicited by Probability Equivalents, or by adjusting the outcome or probability of the bet to make it equivalent to a stable reference amount. In this talk I will present the design of a proposed experiment to compare preferences elicited using these different methods, with the goal of better understanding the processes underlying preference reversals. I will also discuss how comparing response times across the elicitation methods may provide additional insight into the underlying processes, particularly in light of recent research which suggests people are slower to decide on CE’s for $-bets than for P-bets. .

1pm to 2pm - A41 Sir Clive Granger (lunch provided).