2007
DOI: 10.1016/j.econlet.2006.11.020
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Nominal increases and the perception of likelihood

Abstract: Using surveys, this paper shows that a nominal increase in likelihood has a relatively small effect on individual's own perception of likelihood, but a large and robust effect on beliefs about the perception of likelihood by others. These beliefs are consistent with actual choices.JEL: A22, D81, D83.

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