Template-Type:ReDIF-Paper 1.0  
Title: Money does Not Induce Risk Neutral Behavior, but Binary Lotteries Do even Worse
Author-Name: Selten, Reinhard 
Author-Name: Abdolkarim Sadrieh
Author-Name: Klaus Abbink
Classification-JEL: C90, C91, D80, D81
Keywords:Binary lottery payoffs, choices under risk, risk preferences, design of experiments, experimental economics
Abstract: If payoffs are tickets for binary lotteries, which involve only two money prizes, then rationality requires
	expected value maximization in tickets. This payoff scheme was increasingly used to induce risk neutrality in
	experiments. The experiment presented here involved lottery choice and valuation tasks. One subject group was paid in
	binary lottery tickets, another directly in money. significantly greater deviations from risk neutral behavior are
	observed with binary lottery payoffs. This discrepancy increases when sujects have easy access to the alternatives'
	expected values and mean absolute deviations. Behavioral regularities are observed at least as often as with direct
	money payoffs.
Length: pages
Creation-Date: 1995-12
Revision-Date: 
Handle: RePEc:bon:bonsfb:343