dc.contributor.author |
Schmidt, U.
|
|
dc.contributor.author |
Zimper, Alexander
|
|
dc.date.accessioned |
2016-10-12T10:59:59Z |
|
dc.date.available |
2016-10-12T10:59:59Z |
|
dc.date.issued |
2012 |
|
dc.description.abstract |
According to the harmonic sequence paradox, an expected utility decision maker's willingness to pay for a gamble whose expected payoffs evolve according to the harmonic series is finite if and only if his marginal utility of additional income becomes zero for rather low payoff levels. Since the assumption of zero marginal utility is implausible for finite payoff levels, expected utility theory - as well as its standard generalizations such as cumulative prospect theory - are apparently unable to explain a finite willingness to pay. This paper presents first an experimental study of the harmonic sequence paradox. Additionally, it demonstrates that the theoretical argument of the harmonic sequence paradox only applies to time-patient decision makers, whereas the paradox is easily avoided if time-impatience is introduced. |
en_ZA |
dc.description.department |
Economics |
en_ZA |
dc.description.librarian |
hb2016 |
en_ZA |
dc.description.uri |
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)2044-8317 |
en_ZA |
dc.identifier.citation |
Schmidt, U & Zimper, A 2012, 'Explaining the harmonic sequence paradox', British Journal of Mathematical and Statistical Psychology, vol . 65, no. 2, pp. 332-333. |
en_ZA |
dc.identifier.issn |
0007-1102 (print) |
|
dc.identifier.issn |
2044-8317 (online) |
|
dc.identifier.other |
10.1111/j.2044-8317.2011.02026.x |
|
dc.identifier.uri |
http://hdl.handle.net/2263/57123 |
|
dc.language.iso |
en |
en_ZA |
dc.publisher |
Wiley |
en_ZA |
dc.rights |
© 2011 The British Psychological Society.This is the pre-peer reviewed version of the following article : Explaining the harmonic sequence paradox, British Journal of Mathematical and Statistical Psychology, vol. 65, no. 2, pp. 332-333, 2012. doi : 10.1111/j.2044-8317.2011.02026.x. The definite version is available at : http://onlinelibrary.wiley.comjournal/10.1111/(ISSN)2044-8317. |
en_ZA |
dc.subject |
Harmonic sequence paradox |
en_ZA |
dc.subject |
Payoffs |
en_ZA |
dc.title |
Explaining the harmonic sequence paradox |
en_ZA |
dc.type |
Postprint Article |
en_ZA |