Axiom of Monotonicity: An Experimental Test

Sharma, Tridib and Vadovic, Radovan (2010): Axiom of Monotonicity: An Experimental Test.

Abstract

The Axiom of Monotonicity (AM) is a necessary condition for a number of expected utility representations, including those obtained by de Finetti (1930), von Neumann and Morgenstern (1944), Savage (1954), and Anscombe and Auman (1963). The paper reports on experiments that directly test AM by eliminating strategic uncertainty, context, and peer effects. In one treatment, the state space is simple to formulate. Here we do not observe violations of AM. When the state space is a bit more obscure, we find significant violations of AM.

• Item Type: MPRA Paper
• Language: English
• Keywords: monotonicity, dominance, disjunction effect, sure thing principle
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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