| Abstract: | A major assumption of many utility theories is that preferences over lotteries are monotonic in consequences. Under additional reasonable conditions, this means that the choice certainty equivalent (CE) of a lottery should be substitutable for the lottery, but some empirical evidence has suggested otherwise. So several reasonable conditions need to be studied. They are monotonicity of consequences, order preservation of CEs, and bias in estimates of CEs. This paper addresses the second assumption. To do this an algorithm is devised that generates pairs of lotteries with exactly the same preference probability of choice. This permits one to average over both subjects and lotteries. With a sample size of 102, there was no evidence that order preservation of CEs is violated. |
