Instructions for Judged Value of Lotteries


In this study you are asked to judge how much you would bid to play various lotteries. The lotteries differ in their prizes and in the probability that you win the larger prize. The prizes vary from $100 cash, to gift certificates to Barnes and Noble. The probability to win is indicated by a percentage, which gives your chances to win the larger prize. Probabilities range from 1% chance to win to 100% (a sure thing). Otherwise, you win the smaller prize, which can be as low as $0 (nothing) in some of the lotteries. Imagine that you are bidding against 100 other people. This is a "second price" auction, which means that the highest bidder wins the chance to buy the lottery but only has to pay as much as the second highest bid. Economists say that your best strategy is to honestly state the highest amount you would be willing to pay to buy the lottery.

Here are some warmup questions:


W1. $
Probability to win: 100% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

W2. $
Probability to win: 1% Winning Prize:$100 Cash; otherwise $50 cash

W3. $
Probability to win: 100% Winning Prize:$100 Cash; otherwise $50 cash

W4. $
Probability to win: 1% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

Now, please reread the above instructions, and answer the following questions.

1. $
Probability to win: 50% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

2. $
Probability to win: 1% Winning Prize:$100 Cash; otherwise $0

3. $
Probability to win: 1% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

4. $
Probability to win: 100% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

5. $
Probability to win: 50% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

6. $
Probability to win: 60% Winning Prize:$100 Cash; otherwise $0

7. $
Probability to win: 99% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

8. $
Probability to win: 40% Winning Prize:$50 Cash; otherwise $0

9. $
Probability to win: 40% Winning Prize:$100 Cash; otherwise $0

10. $
Probability to win: 99% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

11. $
Probability to win: 99% Winning Prize:$100 Cash; otherwise $50 cash

12. $
Probability to win: 100% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

13. $
Probability to win: 40% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

14. $
Probability to win: 1% Winning Prize:$50 Cash; otherwise $0

15. $
Probability to win: 99% Winning Prize:$50 Cash; otherwise $0

16. $
Probability to win: 60% Winning Prize:$100 Cash; otherwise $50 cash

17. $
Probability to win: 50% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

18. $
Probability to win: 99% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

19. $
Probability to win: 50% Winning Prize:$100 Cash; otherwise $0

20. $
Probability to win: 50% Winning Prize:$50 Cash; otherwise $0

21. $
Probability to win: 40% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

22. $
Probability to win: 100% Winning Prize:$50 Cash; otherwise $0

23. $
Probability to win: 100% Winning Prize:$100 Cash; otherwise $50 cash

24. $
Probability to win: 60% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

25. $
Probability to win: 99% Winning Prize:$100 Cash; otherwise $0

26. $
Probability to win: 40% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

27. $
Probability to win: 1% Winning Prize:$50 Gift Certificate to Barnes and Noble; otherwise $0

28. $
Probability to win: 60% Winning Prize:$50 Cash; otherwise $0

29. $
Probability to win: 60% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

30. $
Probability to win: 1% Winning Prize:$100 Cash; otherwise $50 cash

31. $
Probability to win: 50% Winning Prize:$100 Cash; otherwise $50 cash

32. $
Probability to win: 100% Winning Prize:$100 Cash; otherwise $0

33. $
Probability to win: 40% Winning Prize:$100 Cash; otherwise $50 cash

34. $
Probability to win: 60% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

35. $
Probability to win: 1% Winning Prize:$100 Gift Certificate to Barnes and Noble; otherwise $0

36. $
Probability to win: 100% Winning Prize:$100 Gift certificate to Barnes and Noble; otherwise $50 gift certificate to Barnes and Noble

37. What is your age? years.
38. Gender: Are you Male or Female?
Female
Male

39. How many years of Education have you completed? Put 12 for High School Diploma
Put 16 for college diploma (bachelor's degree).
put 20 for doctorate degree (Ph.D., M.D., etc).
Education:
40. Nationality (country of birth):
41. Comments:

Please check your answers. When you are done, push the button below.

Thank You For Your Participation!