Title
My money or yours: House money payment effects
Document Type
Article
Publication Date
6-1-2010
Abstract
This paper reports the results of an experiment designed to study how subjects' decision making may be affected by the timing of participation payments (or show-up fees). The experiment follows Davis et al. (J. Econ. 30:69-95, 2004) where subjects were asked to make a sequential purchase decision and were given the opportunity to purchase information about the value of a good prior to a decision to purchase the good itself. There, subjects purchased information less often than expected which was interpreted as risk-seeking behavior. Here, we test a payment hypothesis by varying the timing of the participation payment. Payment of a show-up fee before the decision-making stages of the experiment increases information purchase, which we interpret as an increase in risk-averse behavior. © Economic Science Association 2010.
Publication Title
Experimental Economics
Recommended Citation
Davis, L.,
Joyce, B.,
&
Roelofs, M.
(2010).
My money or yours: House money payment effects.
Experimental Economics,
13(2), 189-205.
http://doi.org/10.1007/s10683-010-9235-7
Retrieved from: https://digitalcommons.mtu.edu/michigantech-p/4893