@TechReport{dp-279,
author = {Schmidt, Ulrich and Neugebauer, Tibor},
astring = {Ulrich Schmidt and Tibor Neugebauer},
title = {An Experimental Investigation of the Role of Errors for
Explaining Violations of Expected Utility},
month = {April},
year = {2003},
pages = {14},
size = {47K},
institution = fb,
type = dp,
issn = fb:issn,
number = {279},
language = {en},
keywords = {expected utility, choice errors, Allais paradox, Ellsberg
paradox},
jelclass = {C9, D8},
abstract = {One possible conclusion from recent experimental research
on decision making under risk is that observed behaviour
can be reasonable accommodated by expected utility plus an
error term. This conclusion implies that the violation rate
of expected utility should decrease if errors are excluded.
The present paper presents an experiment which investigates
this implication. Indeed, the results show that the
exclusion of errors leads to a significant reduction of the
violation rate for most of the subjects and most of the
choice problems under risk. However, it turns out that for
decision problems under ambiguity the exclusion of errors
in contrast increases the violation rate significantly. In
this sense the Ellsberg paradox can be regarded as a more
serious challenge of expected utility than the Allais
paradox. More general, while expected utility plus error
term may be regarded as a reasonable representation for
choice under risk this does not seem to be true for
ambiguous choice problems.}
}