Testing expectation theories of decision making without measuring utility or subjective probability

Coombs, Clyde H.; Bezembinder, Thom; Goode, Frank M.

doi:10.1016/0022-2496(67)90042-9

Cited by 63 publications

(36 citation statements)

References 7 publications

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“…Henderson (1941) examined alternative specifications of consumerÕs surplus and compensating variation, which are closely related to the WTP and WTA measures. To the best of our knowledge, the first empirical study that reports the WTA and WTP values is Coombs, Bezembinder, and Goode (1967). They elicited the buying and selling prices for different lottery tickets in a hypothetical setting, and found that the average selling price was more than twice the buying price.…”

Section: Background and Hypothesesmentioning

confidence: 98%

Effects of study design characteristics on the WTA–WTP disparity: A meta analytical framework

Sayman

Öncüler

2005

Journal of Economic Psychology

135

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Section: Background and Hypothesesmentioning

confidence: 98%

Effects of study design characteristics on the WTA–WTP disparity: A meta analytical framework

Sayman

Öncüler

2005

Journal of Economic Psychology

135

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“…Bimbaum and Stegner (1979) found that manipulation of the judge's point of view from buyer to seller produced a change in preference order that could be explained by the assumption that the manipulation affected the configural weight. Buyer's and seller's judgments of value of gambles have been employed by Coombs, Bezembinder, and Goode (1967) and by Lichtenstein and Slavic (1971) to check the generality of other phenomena.…”

mentioning

confidence: 99%

Scale convergence and utility measurement

Birnbaum

Sutton

1992

Organizational Behavior and Human Decision Processes

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In order to investigate derived scales for the utility, or subjective value of money, subjects were instructed to perform four tasks: in two tasks, they judged "ratios" and "diierences" of strengths of preference for monetary amounts; in two other tasks, they judged the values of gambles from buyer's or seller's points of view. The two arrays of data for "ratios" and "differences" were consistent with the hypothesis that most subjects used only one operation to compare monetary amounts, although a few subjects appeared to use two operations. The buyer's and seller's prices would lead to two different utility functions for money under expected utility theory, subjective expected utility theory, or any theory that is additive across outcomes. However, configural-weight utility theory can predict these changes in rank order with an invariant utility function, by postulating that the configural weight of the smaller amount depends on point of view. The data also reveal systematic violations of dominance (monotonicity) that can be described by assuming that the configural weight of zero, when it is the lower value, has smaller weight at low probabilities than nonzero outcomes. Disregarding the minority of subjects who appeared to utilize two operations for judging "ratios" and "differences" in utility, the majority of the data can be well-approximated using a single scale of utility, the subtractive model for "ratio" and "difference" comparisons, and the confiiurai weight, rank-dependent model for buyer's and seller's prices.

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“…The proof will be in whether the MAUs constructed from the reported parameters predict decisions. It may also prove effective to use model-based inference (Coombs et al 1967) rather than asking people to report parameters directly, as illustrated by Edwards (1962) extraction of subjective probabilities from decisions and by functional measurement analyses of gambling choices (Anderson and Shanteau 1970;Weiss 2006).…”

Section: Discussionmentioning

confidence: 99%