Rationality Spillovers

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Todd Cherry Ph.D., Professor (Creator)
Institution
Appalachian State University (ASU )
Web Site: http://www.library.appstate.edu/

Abstract: We design an experiment to test whether the rationality that is induced by market-like discipline spills over to nonmarket valuation settings—a rationality spillover. Our results confirm that this new phenomenon exists. The rationality stimulated by market-like discipline extends to the nonmarket setting, and these spillover effects are robust even when the nonmarket setting involves hypothetical choices and environmental lotteries. We observe that people stop reversing their preferences for lotteries by revising downward their stated values to buy and sell high-risk lotteries; they do not change their preference ordering.

Additional Information

Publication
Todd L. Cherry, Thomas D. Crocker, and Jason F. Shogren (2003) "Rationality spillovers" Journal of Environmental Economics and Management Volume 45 Issue 1 pp. 63-84 [DOI: 10.1016/S0095-0696(02)00008-6] Version of Record Available From (www.sciencedirect.com)
Language: English
Date: 2003
Keywords
preference reversal phenomenon, Economic theory, markets, choice, behavior, utility, uncertainty, tournament, biases

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