An Experimental Analysis of the Prize-Probability Trade-Off in Stopping Problems

• 成果类型: Article
• 署名作者: Antler, Yair; Arad, Ayala
• 署名单位: Tel Aviv University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01366
• 发表日期: 2025
• 关键词: DYNAMIC INCONSISTENCY; rational choice; decision-making; prospect-theory; TOO LONG; RISK; disposition; skewness; prudence; regret

摘要

We experimentally examine how individuals commit to a cutoff stopping rule when facing a sequence of independent lotteries. We identify two main behavior patterns: (a) a small share of participants consistently choose stopping rules whose gain bound (i.e., the accumulated gain at which the sequence stops) is larger than the loss bound, and (b) a larger share of participants consistently choose rules whose loss bound is larger than the gain bound. We introduce a procedural choice model that accounts for these patterns and show that the behavior of most of our participants is inconsistent with prominent theories of decision under risk.