TY  - BOOK
AU  - Andreoni,James
AU  - Sprenger,Charles
ED  - National Bureau of Economic Research.
TI  - Uncertainty Equivalents: Testing the Limits of the Independence Axiom 
T2  - NBER working paper series
PY  - 2011///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - August 2011; Hardcopy version available to institutional subscribers
N2  - There is convincing experimental evidence that Expected Utility fails, but when does it fail, how severely, and for what fraction of subjects? We explore these questions using a novel measure we call the uncertainty equivalent. We find Expected Utility performs well away from certainty, but fails near certainty for about 40% of subjects. Comparing non-Expected Utility theories, we strongly reject Prospect Theory probability weighting, we support disappointment aversion if amended to allow violations of stochastic dominance, but find the u-v model of a direct preference for certainty the most parsimonious approach
UR  - https://www.nber.org/papers/w17342
UR  - http://dx.doi.org/10.3386/w17342
ER  -