The random lottery incentive system is widely used in experimental economics to motivate subjects. This paper investigates its validity. It reports three experiments which compare responses given to decision tasks which are embedded in random lottery designs with responses in ‘single choice’ designs in which each subject faces just one task for real. The experiments were designed to detect cros...

Abstract Previous empirical studies find that lottery-like stocks significantly underperform their nonlottery-like counterparts. Using five different measures of the lottery features in the literature, we document that the anomalies associated with these measures are statedependent: the evidence supporting these anomalies is strong and robust among stocks where investors have lost money, while ...

Fix a Pareto optimal, strategy proof and non-bossy deterministic matching mechanism and define a random matching mechanism by assigning agents to the roles in the mechanism via a uniform lottery. Given a profile of preferences, the lottery over outcomes that arises under the random matching mechanism is identical to the lottery that arises under random serial dictatorship, where the order of di...

This paper studies decision making for Wal­ ley's partially consonant belief functions (pcb ) . In a pcb, the set of foci are par­ titioned. Within each partition, foci are nested. The pcb class includes probability and possibility functions as extreme cases. We adopt an axiomatic system, similar in spirit to von Neumann and Morgenstern's ax­ ioms for preferences leading to the linear util­ ity...

A ladder lottery, known as “Amidakuji” in Japan, is a common way to choose one winner or to make an assignment randomly in Japan. Formally, a ladder lottery L of a permutation π = (x1, x2, . . . , xn) is a network with n vertical lines (lines for short) and many horizontal lines (bars for short) connecting two consecutive vertical lines. The top ends of lines correspond to π. See Fig. 1. Each n...

Choosing a major field of study to secure a good job after graduation is a tacit coordination problem that requires considering others' choices. We examine how feeling skillful, either induced (Experiment 1) or measured (Experiment 2), affects coordination in this type of task. In both experiments participants chose between two lotteries, one offering a larger prize than the other. Participants...