The asymmetric dominance effect refers to the phenomenon according to which the choice

probability of an alternative increases when an inferior alternative - the decoy - is included

into the choice set. The objective of this experimental study is twofold. First, we investigate

the asymmetric dominance effect on two-outcome lotteries with almost equal expected values.

We find that the impact of a decoy on low-variance lotteries (LVLs) is much higher than on

high-variance lotteries (HVLs). Second, we examine the asymmetric dominance effect in the

presence of two decoys. While the asymmetric dominance effect persists when the choice

set includes two decoys, the effect is not always further enhanced compared to the setting

with one decoy and again much stronger for LVLs than for HVLs. Controlling for subjects’

degrees of risk aversion, we find support for consistency between individual risk preferences

and choice behavior among the lotteries. However, we observe decoy effects of equal strength

irrespective of the subjects’ degree of risk aversion. Thus, our analysis indicates that to a

substantial extent the presence of decoys subtly makes decision-makers choose against their

risk preferences by favoring lotteries that entail risks contrary to their elicited individual

risk-taking profile.