Relative Variance Preferences in a Choice-Among-Bets Paradigm
Abstract
The validity of the prime assumption of proper scoring rules (PSR), that people maximize subjective expected value (SEV), was tested in the case where SEV was assumed to equal EV. A choice-among-bets paradigm was used in which the lists of bets conformed to the requirements of a PSR. Both real and hypothetical payoff conditions were used, and in addition, EV, variance, and odds of the gambles were systematically varied. The use of list of bets generated by a PSR as a response mode for inferring subjective probabilities is questioned because of the weakness of the SEV maximization assumption in this context.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 02, 1973
- Accession Number
- AD0770187
Entities
People
- Barbara C. Goodman
- Dennis G. Fryback
- Raymond C. Seghers
Organizations
- University of Michigan