Decision making often entails longshot risks involving a small chance of receiving a substantial outcome. People tend to be risk preferring (averse) when facing longshot risks involving significant gains (losses). This differentiation towards longshot risks underpins the markets for lottery as well as for insurance. Both lottery and insurance have emerged since ancient times and continue to pla...

An alternative voting system, referred to as probabilistic Borda rule, is developed and analyzed. The winning alternative under this system is chosen by lottery where the weights are determined from each alternative’s Borda score relative to all Borda points possible. Advantages of the lottery include the elimination of strategic voting on the set of alternatives under consideration and breakin...

In the Netherlands, students are admitted to medical school through (1) selection, (2) direct access by high pre-university Grade Point Average (pu-GPA), (3) lottery after being rejected in the selection procedure, or (4) lottery. At Radboud University Medical Center, 2010 was the first year we selected applicants. We designed a procedure based on tasks mimicking the reality of early medical sc...

BACKGROUND Research indicates that certain personality traits relate to performance in the medical profession. Yet, personality testing during selection seems ineffective. In this study, we examine the extent to which different medical school selection processes call upon desirable personality characteristics in applicants. METHODS 1019 of all 1055 students who entered the Dutch Bachelor of M...

Probability reasoning plays an essential role in our everyday life. It has been argued that making decisions under uncertain circumstances were becoming more and more important with aging. The current study examined if there were age differences in conjunction fallacies and in the intuitive-experiential and analytical-rational information processing styles based on the Cognitive-Experiential Se...

Frazzini and Pedersen (2014) document that a betting against beta strategy that takes long positions in low-beta stocks and short positions in high-beta stocks generates a large abnormal return of 6.6% per year and they attribute this phenomenon to funding liquidity risk. We find strong confirmation of their results on U.S. equity data, but provide evidence of an alternative explanation. Portfo...