Violations of expected utility theory are sometimes attributed to imprecise preferences interacting with a lack of learning opportunity in the experimental laboratory. This paper reports an experimental test of whether a learning opportunity which engenders accurate probability assessments, by enhancing understanding of the meaning of stated probability information, causes anomalous behaviour to diminish. The data show that whilst in some cases expected utility maximising behaviour increases with the learning opportunity, so too do systematic violations. Therefore, there should be no presumption (...) that anomalous behaviour under risk is transient and that discovered preferences will be appropriately described by expected utility theory. (shrink)

The majority consensus in the empirical literature is that probability weighting functions are typically inverse-S shaped, that is, people tend to overweight small and underweight large probabilities. A separate stream of literature has reported event-splitting effects and shown that they can explain violations of expected utility. This leads to the questions whether the observed shape of weighting functions is a mere consequence of the coalesced presentation and, more generally, whether preference elicitation should rely on presenting lotteries in a canonical split (...) form instead of the commonly used coalesced form. We analyze data from a binary choice experiment where all lottery pairs are presented in both split and coalesced forms. Our results show that the presentation in a split form leads to a better fit of expected utility theory and to probability weighting functions that are closer to linear. We thus provide some evidence that the extent of probability weighting is not an ingrained feature, but rather a result of processing difficulties. (shrink)