Spring til...

  • Hovedindhold
  • Indholdsfortegnelse
  • Sidefod
  • Dansk da
Scientific article 1999

Testing the Intransitivity Explanation of the Allais Paradox

Authors:

  • Ebbe Groes
  • Hans Jørgen Jacobsen
  • Birgitte Sloth
  • Torben Tranæs
This paper uses a two-dimensional version of a standard common consequence experiment to test the intransitivity explanation of Allais-paradox-type violations of expected utility theory. We compare the common consequence effect of two choice problems differing only with respect to whether alternatives are statistically correlated or independent. We framed the experiment so that intransitive preferences could explain violating behavior when alternatives are independent, but not when they are correlated. We found the same pattern of violation in the two cases. This is evidence against intransitivity as an explanation of the Allais Paradox. The question whether violations of expected utility are mainly due to intransitivity or to violation of independence is important since it is exactly on this issue the main new decision theories differ.

Authors

  • Ebbe GroesHans Jørgen JacobsenBirgitte SlothTorben Tranæs

About this publication

  • Published in

    Theory and Decision
VIVE – The Danish Centre for Social Science Research provides knowledge that contributes to developing the welfare society and strengthening quality development, efficiency enhancement and governance in the public sector, both in municipalities, regions and nationally.
Tel: +45 44 45 55 00
E-mail: vive@vive.dk
EAN: 5798000354845
CVR: 23 15 51 17