Relative Variance Preferences in a Choice-Among-Bets Paradigm
MICHIGAN UNIV ANN ARBOR ENGINEERING PSYCHOLOGY LAB
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The validity of the prime assumption of proper scoring rules PSR, that people maximize subjective expected value SEV, was tested in the case where SEV was assumed to equal EV. A choice-among-bets paradigm was used in which the lists of bets conformed to the requirements of a PSR. Both real and hypothetical payoff conditions were used, and in addition, EV, variance, and odds of the gambles were systematically varied. The use of list of bets generated by a PSR as a response mode for inferring subjective probabilities is questioned because of the weakness of the SEV maximization assumption in this context.