Testing the effects of similarity on risky choice: Implications for violations of expected utility

Our aim in this paper was to establish an empirical evaluation for similari ty effects modeled by Rubinstein; Azipurua et al.; Leland; and Sileo. These tests are conducted through a sensitivity analysis of two well-known examp les of expected utility (EU) independence violations. We found that subject ive similarity reported by respondents was explained very well by objective measures suggested in the similarity literature. The empirical results of this analysis also show that: (1) the likelihood of selection for the riski er choice increases as the pair becomes more similar, (2) these choice patt erns are consistent with well-known independence violations of expected uti lity, and (3) a significant proportion of individuals exhibit intransitive choice patterns predicted under similarity effects, but not allowed under g eneralized expected utility models for risky choice.