A Reconsideration of Common Ratio Effect and Probability Weighting

Last registered on August 12, 2021

Pre-Trial

Trial Information

General Information

Title
A Reconsideration of Common Ratio Effect and Probability Weighting
RCT ID
AEARCTR-0008058
Initial registration date
August 11, 2021
Last updated
August 12, 2021, 2:04 PM EDT

Locations

Region

Primary Investigator

Affiliation
Caltech

Other Primary Investigator(s)

PI Affiliation
Cornell
PI Affiliation
University of Delaware
PI Affiliation
Federal Reserve
PI Affiliation
Caltech

Additional Trial Information

Status
In development
Start date
2021-08-12
End date
2021-10-01
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This project is motivated by the wide body of research documenting and rationalizing deviations from Expected Utility (EU) in lottery choices. Among the most prominent apparent deviations is the Common Ratio Effect (CRE) initially documented by Allais. We explore the mechanisms behind these effects.
External Link(s)

Registration Citation

Citation
McGranahan, Christina et al. 2021. "A Reconsideration of Common Ratio Effect and Probability Weighting." AEA RCT Registry. August 12. https://doi.org/10.1257/rct.8058-1.0
Experimental Details

Interventions

Intervention(s)
This project is motivated by the wide body of research documenting and rationalizing deviations from Expected Utility (EU) in lottery choices. Among the most prominent apparent deviations is the Common Ratio Effect (CRE) initially documented by Allais. We explore the mechanisms behind these effects. Subjects will make choices between lotteries.
Intervention Start Date
2021-08-12
Intervention End Date
2021-10-01

Primary Outcomes

Primary Outcomes (end points)
Valuations of lotteries.
Primary Outcomes (explanation)
See uploaded document for analysis plan.

Secondary Outcomes

Secondary Outcomes (end points)
See uploaded document for analysis plan.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Experimental subjects will make choices between lotteries.
Experimental Design Details
See uploaded document for design details and analysis plan.
Randomization Method
Randomization by computer for both lotteries faced and outcomes.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
900 Individuals
Sample size: planned number of observations
900 Individuals
Sample size (or number of clusters) by treatment arms
300 per treatment arm.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
See uploaded document for evaluation of detectable effect sizes.
IRB

Institutional Review Boards (IRBs)

IRB Name
Caltech
IRB Approval Date
2021-03-26
IRB Approval Number
21-1073
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials