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- Title
Are Preferences Monotonic? Testing some Predictions of Regret Theory.
- Authors
Loomes, Graham; Starmer, Chris; Sugden, Robert
- Abstract
In this paper we demonstrate that the assumption of 'regret aversion', which has been invoked in regret theory to explain several well documented violations of expected utility theory, also implies the existence of strict preferences between some stochastically equivalent actions and implies certain systematic violations of monotonicity. We report an experimental test of these predictions. We find that, while choices between stochastically equivalent actions are entirely consistent with expected utility theory, there is clear evidence of the monotonicity violations predicted by regret theory.
- Subjects
THEORY; ECONOMICS; ECONOMIC demand; SUPPLY &; demand; EXPECTED returns; AVERSION
- Publication
Economica, 1992, Vol 59, Issue 233, p17
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2555063