Abstract The common-ratio effect and the Allais Paradox (common-consequence effect) are two best‐known violations of Expected Utility Theory. We reexamine data from 39 articles reporting experiments (143 designs/parameterizations, 14,909 observations) find that is systematically affected by experimental design implementation choices. more likely to be observed in with a low factor, high ratio m...

We study a trading process for a pure exchange economy with overlapping generations. This process is based on the maximization, at each stage, of a collective benefit (or surplus). We show that this process converges to a Pareto-optimal allocation. This extends the second fundamental convergence theorem of Allais [1967] to a pure exchange economy with overlapping generations.

We propose an axiomatic framework for updating complete preference orderings without the monotonicity axiom. The induced preference reversals are justified on the basis of a normative interpretation that reconciles consequentialism with adequate forms of choice consistency. We conclude that preferences need not, and in some contexts even should not be recursive, thus confirming the intuition of...

Festschrift Volume honoring Ward Edwards, scheduled for publication in 1998. The chapter was published in 1999 and should be cited as follows: Birnbaum (1999). The paradoxes of Allais, stochastic dominance, and decision weights. In J. C. Shanteau, B. A. Mellers, & D. Schum (Eds.), Decision Science and Technology: Reflections on the contributions of Ward Edwards. Boston, MA: Kluwer Academic Publ...