Vecon Lab Pairwise Lottery Choice Experiment

This program sets up a series of single-person lottery choices designed to evaluate theories of decision making in risky situations. (An alternative lottery choice program that imposes a probability-based menu structure is listed as the "Lottery Choice," LC program from the Decisions Menu.) If you decide to continue with the flexible design and arrangement of lottery choices permitted by this program, the next pages will let you specify the payoffs and probabilities for each choice option or prospect. These prospects are then grouped as alternatives, with each choice problem having up to three alternatives. In this manner, you can construct a series of lottery choice problems that which can be presented in any predetermined or random order. It is also possible to transform the reference points and scales of payoffs from one treatment to the next. This program can be used to implement well-known Allais paradox problems, among other things.

Individual choice experiments have long been used to document violations of the predictions of standard expected utility theory. The instructor should be cautioned from making too much of classroom experiments with hypothetical incentives, since the actual payment of prizes earned may sometimes have a dramatic effect on observed behavior.

Vecon Lab - December 4, 2023