Is the Allais paradox due to appeal of certainty or aversion to zero?
- Publisher:
- Springer
- Publication Type:
- Journal Article
- Citation:
- Experimental Economics, 2021, 24, (3), pp. 751-771
- Issue Date:
- 2021
Open Access
Copyright Clearance Process
- Recently Added
- In Progress
- Open Access
This item is open access.
© 2020, Economic Science Association. We provide a novel but intuitive explanation for expected utility violations found in the Allais paradox: individuals are commonly averse to receiving nothing. We call this phenomenon the zero effect. Our laboratory experiments show support for the zero effect. By contrast, the evidence for the certainty effect is weak to nonexistent.
Please use this identifier to cite or link to this item: