When and Why Do Consumers Devalue Risky Prospects?

Alice Moon, University of California Berkeley, USA
Leif Nelson, University of California Berkeley, USA
Contrary to explanations of the uncertainty effect, in which people value lotteries less than their worst possible outcome, we find that people expect to enjoy lotteries as much as their best possible outcomes, but will still pay less for lotteries than their worst outcome for sure.
[ to cite ]:
Alice Moon and Leif Nelson (2015) ,"When and Why Do Consumers Devalue Risky Prospects?", in NA - Advances in Consumer Research Volume 43, eds. Kristin Diehl and Carolyn Yoon, Duluth, MN : Association for Consumer Research, Pages: 265-269.