
Abstract
We propose a new method to elicit individuals' risk preferences. Similar to Holt and Laury (2002), we use a simple multiple price-list format. However, our method is based on a general notion of increasing risk, which allows classifying individuals as more or less risk-averse without assuming a specic utility framework. In a laboratory experiment we compare both methods. Each classies individuals almost identically as risk-averse, -neutral, or -seeking. However, classications of individuals as more or less risk-averse dier substantially. Moreover, our approach yields higher measures of risk aversion, and only with our method these measures are robust toward increasing stakes.
Item Type: | Paper |
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Form of publication: | Preprint |
Keywords: | Risk Aversion, Multiple Price-List, Elicitation, Laboratory Experiment, Holt and Laury Method, Mean Preserving Spreads, Non-EUT, Increasing Risk |
Faculties: | Economics Economics > Munich Discussion Papers in Economics |
Subjects: | 300 Social sciences > 300 Social sciences, sociology and anthropology 300 Social sciences > 330 Economics |
JEL Classification: | D81, C91 |
URN: | urn:nbn:de:bvb:19-epub-11873-7 |
Language: | English |
Item ID: | 11873 |
Date Deposited: | 02. Nov 2010, 21:32 |
Last Modified: | 06. Nov 2020, 08:49 |