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Negative recency, randomization device choice, and reduction of compound lotteries

Research output: Contribution to journalJournal article

<mark>Journal publication date</mark>05/2012
<mark>Journal</mark>Economics Letters
Issue number2
Number of pages5
Pages (from-to)263-267
Publication statusPublished
Original languageEnglish


We report an experiment in which subjects are not indifferent between real-money lotteries implemented with randomization devices that are equivalent under the Reduction Axiom. Instead, choice behavior is consistent with subjective distortion of conditional probability, and this persists in treatment conditions that control for (i) computational limitations and (ii) possible confounding by ratio bias.