Abstract
We investigate utility dependence on probability using a new methodology that examines how indifference statements vary with the probability of obtaining times and costs of individual trips. Of 127 subjects, 8 supplied 3 (out of 3) sets of indifference statements consistent with probability independence. Those subjects with 2 or more sets of indifference statements violating probability independence exhibited a systematic dependence, in that knowing the “direction” of a subject's violation in one set of indifference statements would increase the likelihood of his or her violating other sets of indifference statements in the same direction. Data show that this systematic violation of dependence should not be attributed to artifacts of the experiment.
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McCord, M.R., Franzese, O. Empirical evidence of two-attribute utility dependence on probability. Theor Decis 35, 337–351 (1993). https://doi.org/10.1007/BF01075204
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DOI: https://doi.org/10.1007/BF01075204