An empirical evaluation of the transitivity, monotonicity, accounting, and conjoint axioms for perceived risk

Elke U. Weber, William P. Bottom

Research output: Contribution to journalArticle

30 Scopus citations

Abstract

This study tests the adequacy of the axioms underlying Luce and Weber's (1986) conjoint expected risk model. Risk judgments are found to be transitive. Monotonicity or the substitution principle per se seems to hold, but the related probability accounting assumption is violated. The conjoint structure assumptions about the effect of change of scale transformations on risk hold for negative-outcome lotteries but encounter some difficulty for positive-outcome lotteries. Possible explanations for violations are suggested, and implications of these results for the modeling of perceived risk are discussed.

Original languageEnglish (US)
Pages (from-to)253-275
Number of pages23
JournalOrganizational Behavior and Human Decision Processes
Volume45
Issue number2
DOIs
StatePublished - Apr 1990
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Applied Psychology
  • Organizational Behavior and Human Resource Management

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