In lottery gambling, the common phenomenon of risk aversion shows up as preference of the option with the higher win probability, even if a riskier alternative offers a greater expected value. Because riskier choices would optimize profitability in such cases, the present study investigates the visual format, with which lotteries are conveyed, as potential instrument to modulate risk attitudes....

To what extent can people choose advantageously without knowing why they are making those choices? This hotly debated question has capitalized on the Iowa Gambling Task (IGT), in which people often learn to choose advantageously without appearing to know why. However, because the IGT is unconstrained in many respects, this finding remains debated and other interpretations are possible (e.g., ri...

This study examined the relationship between sensorimotor and motivational functions of the corpus striatum. In rats, excitotoxic lesions of the corpus striatum (neostriatum and globus pallidus) caused by kainic or quisqualic acid can produce both aversive aphagia and a "choreic" sensorimotor syndrome: an exaggerated treading of the forepaws that is triggered by oral sensory stimulation. Experi...

In this paper, we show that risk vulnerability can be associatedwith the concept of downside risk aversion (DRA) and an assumption about its behavior, namely that it is decreasing inwealth. Specifically, decreasing downside risk aversion in the Arrow–Pratt and Ross senses are respectively necessary and sufficient for a zero-mean background risk to raise the aversion to other independent risks. ...

Many mathematical forms of utility functions have been considered in the economics and finance literature, although, as Xie (2000) has said, by far the most widely employed are those displaying constant relative risk aversion (CRRA). Xie pointed out the dangers implicit in an inappropriate assumption of CRRA and the desirability of more flexible utility functions permitting a greater range of r...

Preference reversals are found in measurements of ambiguity aversion even under constant psychological and informational circumstances. The reversals are of a fundamentally different nature than the reversals found before because they cannot be explained by context-dependent weightings of attributes. We offer an explanation based on Sugden’s random-reference theory with different elicitation me...

We address the following question: When can one person properly be said to be more delay averse than another? In reply, several (nested) comparison methods are developed. These methods yield a theory of delay aversion which parallels that of risk aversion. The applied strength of this theory is demonstrated in a variety of dynamic economic settings, including the classical optimal growth and tr...

Experimental results on the Ellsberg paradox typically reveal behavior that is commonly interpreted as ambiguity aversion. The experiments reported in the current paper were intended to examine the extent to which such ambiguity aversion can be captured by the Hurwicz criterion. However, contrary to our expectations, Laplace’s principle of insufficient reason performed substantially better than...