Data and Code for: Distinguishing Common Ratio Preferences from Common Ratio Effects Using Paired Valuation Tasks

Principal Investigator(s):  View help for Principal Investigator(s) Christina McGranaghan, University of Delaware; Kirby Nielsen, California Institute of Technology; Ted O'Donoghue, Cornell University; Jason Somerville, Federal Reserve Bank of New York; Charles Sprenger, California Institute of Technology

Version:  View help for Version V1

Name File Type Size Last Modified
  replication_files 11/27/2023 05:53:PM

Project Citation: 

McGranaghan, Christina, Nielsen, Kirby, O’Donoghue, Ted, Somerville, Jason, and Sprenger, Charles. Data and Code for: Distinguishing Common Ratio Preferences from Common Ratio Effects Using Paired Valuation Tasks. Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-01-11. https://doi.org/10.3886/E194003V1

Project Description

Summary:  View help for Summary Without strong assumptions about how noise manifests in choices, we can infer little from existing empirical observations of the common ratio effect (CRE) about whether there exists an underlying common ratio preference (CRP). We propose to solve this inferential challenge using paired valuations, which yield valid inference under common assumptions. Using this approach in an online experiment with 900 participants, we find no evidence of a systematic CRP. To reconcile our findings with existing evidence, we present the same participants with paired choice tasks and demonstrate how noise can generate a CRE even for individuals without an associated CRP.

Scope of Project

Subject Terms:  View help for Subject Terms Common Ratio Effect; Paired Valuation Task; Probability Weighting
JEL Classification:  View help for JEL Classification
      C91 Design of Experiments: Laboratory, Individual
      D81 Criteria for Decision-Making under Risk and Uncertainty
      D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Geographic Coverage:  View help for Geographic Coverage United States, Western Europe
Time Period(s):  View help for Time Period(s) 8/2021 – 8/2021
Collection Date(s):  View help for Collection Date(s) 8/2021 – 8/2021 (August 2021)
Universe:  View help for Universe Prolific Respondents who meet the following eligibility criteria: 
  • At least a high school education
  • Between the ages of 18 and 31
  • Living in the United States or Western Europe
  • Minimum Prolific approval rating of 99 percent
  • Fluent in English
  • Completed 50 to 1,000 previous submissions.
Data Type(s):  View help for Data Type(s) experimental data

Methodology

Response Rate:  View help for Response Rate 900 out of 908 respondents who began the survey completed it. 
Sampling:  View help for Sampling Standard sample on Prolific.co
Data Source:  View help for Data Source Prolific.co
Collection Mode(s):  View help for Collection Mode(s) web-based survey
Unit(s) of Observation:  View help for Unit(s) of Observation Individual

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Published Versions

V1 [2024-01-11]

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