AEA RCT Registry

Trial Information

General Information

Title

On the Dissonance between Expected Utility and the Common Ratio Paradox

RCT ID

AEARCTR-0013167

Initial registration date

March 10, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

March 15, 2024, 6:37 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name

Chi Chong Leong

Affiliation

University of Manchester

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Horst Zank

PI Affiliation

University of Manchester

Contact Investigator

Additional Trial Information

Status

In development

Start date

2024-03-13

End date

2024-05-31

Keywords

Behavior, Lab

Additional Keywords

Decision Theory, Common Ratio Paradox, Independence Axiom

JEL code(s)

D81, D91

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

This project is motivated by extensive research aimed at understanding deviations from Expected Utility (EU) in decision-making under risk. One of the most notable departures is the Common Ratio Paradox, first identified by Allais. We specifically focus on the dual version of the common ratio paradox and some other axioms implied by the von Neumann–Morgenstern independence axiom. Participants will be randomly assigned to different treatment groups, which will vary in terms of probability and lottery composition. The research will utilize a randomized control trial to assess the influence of various probability and outcome conditions as well as the power of information.

External Link(s)

Registration Citation

Citation

Leong, Chi Chong and Horst Zank. 2024. "On the Dissonance between Expected Utility and the Common Ratio Paradox ." AEA RCT Registry. March 15. https://doi.org/10.1257/rct.13167-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

This project is motivated by extensive research aimed at understanding deviations from Expected Utility (EU) in decision-making under risk. One of the most notable departures is the Common Ratio Paradox, first identified by Allais. We specifically focus on the dual version of the common ratio paradox and some other axioms implied by the von Neumann–Morgenstern independence axiom. Participants will be randomly assigned to different treatment groups, which will vary in terms of probability and lottery composition. The research will utilize a randomized control trial to assess the influence of various probability and outcome conditions as well as the power of information.

Intervention Start Date

2024-03-18

Intervention End Date

2024-05-31

Primary Outcomes

Primary Outcomes (end points)

Valuation and preference over lotteries.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Subjects will be required to choose their preferred lotteries. The set of lotteries consists of some baseline lotteries and those that are manipulated according to two decision rules. Subjects will be allowed to revisit some of their earlier choices.

Experimental Design Details

Not available

Randomization Method

Randomization is done by the computer.

Randomization Unit

Individual

Was the treatment clustered?

No

Experiment Characteristics

Sample size: planned number of clusters

200 subjects

Sample size: planned number of observations

200 subjects

Sample size (or number of clusters) by treatment arms

100 in each of the outcome and probability condition.
30 in each of the information treatment.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB

Institutional Review Boards (IRBs)

IRB Name

University of Manchester Social Science Ethical Review Panel

IRB Approval Date

2024-02-23

IRB Approval Number

2024-17992-32957

Analysis Plan