Regret and preferences for randomization

Last registered on February 26, 2026

View Trial History

Pre-Trial

Trial Information

General Information

Title

Regret and preferences for randomization

RCT ID

AEARCTR-0015997

Initial registration date

May 19, 2025

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

May 27, 2025, 10:31 AM EDT

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

Last updated

February 26, 2026, 5:37 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

Austria

Region

Primary Investigator

Name

Moritz Loewenfeld

Affiliation

University of Vienna

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

Completed

Start date

2025-05-15

End date

2025-05-30

Keywords

Behavior

Additional Keywords

JEL code(s)

D81

Secondary IDs

Prior work

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

Abstract

A growing body of literature documents preferences for randomization in decision-making under risk. When faced with a choice between two lotteries, many experimental subjects prefer to delegate the decision to a coin flip. We propose a novel model in which individuals randomize to hedge against regret from unfavorable outcomes. This model explains puzzling findings in the literature, such as high rates of randomization even when one option first-order stochastically dominates the other. We test a distinct prediction in an online experiment: (1) subjects randomize more when prospects are more negatively correlated.

External Link(s)

Registration Citation

Citation

Loewenfeld, Moritz. 2026. "Regret and preferences for randomization." AEA RCT Registry. February 26. https://doi.org/10.1257/rct.15997-1.1

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention (Hidden)

Intervention Start Date

2025-05-15

Intervention End Date

2025-05-30

Primary Outcomes

Primary Outcomes (end points)

Probability of choosing a first-order stochastically dominant lottery under three different correlation structures: 1) state-wise 2) independent 3) maximally negatively correlated. For details, see the document PAP.pdf.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We study preferences for randomization in risky decision-making under different correlation structures. In our online experiment, participants choose probability mixtures between two risky lotteries. Each lottery has two possible outcomes with known probabilities. Participants are required to choose a probability with which to play each lottery, ranging from 0% to 100% (including corner solutions).
There are three within-subject conditions. 1) the lotteries are independent 2) the lotteries are perfectly positively correlated 3) the lotteries are perfectly negatively correlated. This allows us to test whether preferences for mixing depend on the correlation structure, as predicted by our model. Subjects encounter the three within-subject conditions in random order.
For details, see the document PAP.pdf.

Experimental Design Details

Randomization Method

Computer

Randomization Unit

The unit of randomization is the individual participant. Each participant is exposed to all correlation structures (independent, positively correlated, negatively correlated) in randomized order. Within each structure, the order of decision tasks is also randomized at the individual level to control for order effects.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

140 participants. Who pass a predefined criterion. For details, see the document PAP.pdf.

Sample size: planned number of observations

18 choices by each of 140 participants.

Sample size (or number of clusters) by treatment arms

All 140 individuals participate in all three treatment arms (within-subject design):
140 individuals: Independent correlation structure
140 individuals: Positively correlated structure
140 individuals: Negatively correlated structure

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

Supporting Documents and Materials

IRB