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On correlated lotteries in economic applications
Title / Series / Name
Publication Volume
Publication Issue
Pages
Editors
Keywords
Attention
Binary lotteries
Correlation
Correlation neglect
Portfolio choice
Economics and Econometrics
Organizational Behavior and Human Resource Management
Binary lotteries
Correlation
Correlation neglect
Portfolio choice
Economics and Econometrics
Organizational Behavior and Human Resource Management
URI
https://hdl.handle.net/20.500.14018/27600
Abstract
Economic models and experiments frequently use lotteries with only a few outcomes. We study the correlation of such lotteries and discuss its relevance for economic applications. In particular, we fully characterize the joint distribution of two binary lotteries via their first three univariate moments and their correlation coefficient. As we illustrate alongside several examples, the resulting parametrization may be useful for economic modeling and experimental design.
Topic
Publisher
Place of Publication
Type
Journal article
Date
2023-11-01
Language
ISBN
Identifiers
10.1016/j.jebo.2023.08.025