Seminar Stochastic dominance and demand for surprise Microeconomics Seminar Add to calendar 2024-02-06 14:00 2024-02-06 15:15 Europe/Rome Stochastic dominance and demand for surprise Conference Room Villa La Fonte YYYY-MM-DD Print Share: Share on Facebook Share on BlueSky Share on X Share on LinkedIn Send by email Scheduled dates Feb 06 2024 14:00 - 15:15 CET Conference Room, Villa La Fonte Organised by Department of Economics In this seminar, Séverine Toussaert (St John's College - Oxford University) will present the paper 'Stochastic Dominance and Demand for Surprise'. Decision theorists usually take a normative view on stochastic dominance: a decision maker who chooses a dominated lottery must be making a mistake. This paper provides evidence that stochastic dominance violations may naturally occur in situations where anticipatory utility is high, such as going on a holiday trip. In such a situation, the decision maker may trade the certainty of going to his favourite destination for the excitement of not knowing where he will go. To document this phenomenon, I conduct an experiment in which participants make a series of binary choices between a sure destination and a "surprise lottery" over holiday trips, with the lottery outcome revealed close to the date of travel. I vary lottery characteristics to understand when violations are most likely to occur and analyse their properties. I discuss the implications for the design of "surprise goods" and the modelling of anticipatory utility.