Heterogeneity in risky choice behavior in a broad population

American Economic Review

Volumn 101, Issue 2, 2011, Pages 664-694

  Von Gaudecker, Hans Martin ^a   Van Soest, Arthur ^b   Wengström, Erik ^c,d  

^a UNIVERSITY OF MANNHEIM   (Germany)

^b NETSPAR   (Netherlands)

^c LUND UNIVERSITY   (Sweden)

^d UNIVERSITY OF COPENHAGEN   (Denmark)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79955038576     PISSN: 00028282     EISSN: None     Source Type: Journal    
DOI: 10.1257/aer.101.2.664     Document Type: Article

References (59)

1. Abdellaoui, Mohammed, Carolina Barrios, and Peter P. Wakker. 2007. "Reconciling Introspective Utility with Revealed Preference: Experimental Arguments Based on Prospect Theory." Journal of Econometrics, 138(1): 356-78. (Pubitemid 46452999)
2. Ahlbrecht, Martin, and Martin Weber. 1996. "The Resolution of Uncertainty: An Experimental Study." Journal of Institutional and Theoretical Economics, 152(4): 593-607.
3. Allais, Maurice. 1953. "Le Comportement de l'Homme Rationnel devant le Risque: Critique des Postulats et Axiomes de l'Ecole Americaine." Econometrica, 21(4) 503-46.
4. Andersen, Steffen, Glenn W. Harrison, Morten Igel Lau, and E. Elisabet Rutström. 2006. "Elicitation Using Multiple Price List Formats." Experimental Economics, 9(4): 383-405. (Pubitemid 44953106)
5. Andersen, Steffen, Glenn W. Harrison, Morten I. Lau, and E. Elisabet Rutström. 2008. "Eliciting Risk and Time Preferences." Econometrica, 76(3): 583-618.
6. Andersen, Steffen, Glenn W. Harrison, Morten Igel Lau, and E. Elisabet Rutström. 2010. "Preference Heterogeneity in Experiments: Comparing the Field and Laboratory." Journal of Economic Behavior and Organization, 73(2): 209-24.
7. Arrow, Kenneth J. 1965. Aspects of the Theory of Risk-Bearing. Helsinki: Yrjö Jahnssonin Söötiö.
8. Ballinger, T. Parker, and Nathaniel T. Wilcox. 1997. "Decisions, Error and Heterogeneity." Economic Journal, 107(443): 1090-1105. (Pubitemid 127575104)
9. Baltussen, Guido, Thierry Post, and Pim van Vliet. 2006. "Violations of Cumulative Prospect Theory in Mixed Gambles with Moderate Probabilities." Management Science, 52(8): 1288-90. (Pubitemid 44330535)
10. Baltussen, Guido, Thierry Post, Martijn J. van den Assem, and Peter P. Wakker. 2008. "Random Task Incentive Systems in Risky Choice Experiments." Unpublished.
11. Banks, James, and Zoë Oldfield. 2007. "Understanding Pensions: Cognitive Function, Numerical Ability and Retirement Saving." Fiscal Studies, 28(2): 143-70.
12. Bellemare, Charles, Sabine Kröger, and Arthur van Soest. 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities." Econometrica, 76(4): 815-39.
13. Benartzi, Shlomo, and Richard H. Thaler. 1995. "Myopie Loss Aversion and the Equity Premium Puzzle." Quarterly Journal of Economics, 110(1): 73-92.
14. Benjamin, Daniel J., Sebastian A. Brown, and Jesse M. Shapiro. 2006. "Who is 'Behavioral'? Cognitive Ability and Anomalous Preferences." http://faculty.chicagobooth.edu/jesse.shapiro/research/iq050506.pdf
15. Binswanger, Hans P. 1980. "Attitudes toward Risk: Experimental Measurement in Rural India." American Journal of Agricultural Economics, 62(3): 395-407.
16. Bleichrodt, Han, Jose Luis Pinto, and Peter P. Wakker. 2001. "Making Descriptive Use of Prospect Theory to Improve the Prescriptive Use of Expected Utility." Management Science, 47(11): 1498-1514. (Pubitemid 34192837)
17. Booij, Adam S., and Gijs van de Kuilen. 2009. "A Parameter-Free Analysis of the Utility of Money for the General Population under Prospect Theory." Journal of Economic Psychology, 30(4): 651-66.
18. Borghans, Lex, James J. Heckman, Bart H. H. Golsteyn, and Huub Meijers. 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion." Journal of the European Economic Association, 7(2-3): 649-58.
19. Caplin, Andrew, and John Leahy. 2001. "Psychological Expected Utility Theory and Anticipatory Feelings." Quarterly Journal of Economics, 116(1): 55-79. (Pubitemid 33593850)
20. Chew, Soo Hong, and Joanna L. Ho. 1994. "Hope: An Empirical Study of Attitude toward the Timing of Uncertainty Resolution." Journal of Risk and Uncertainty, 8(3): 267-88.
21. Choi, Syngjoo, Raymond Fisman, Douglas Gale, and Shachar Kariv. 2007. "Consistency and Heterogeneity of Individual Behavior under Uncertainty." American Economic Review, 97(5): 1921-38.
22. Conte, Anna, John D. Hey, and Peter G. Moffatt. Forthcoming. "Mixture Models of Choice under Risk." Journal of Econometrics.
23. Croson, Rachel, and Uri Gneezy. 2009. "Gender Differences in Preferences." Journal of Economic Literature, 47(2): 448-74.
24. de Roos, Nicolas, and Yianis Sarafidis. 2010. "Decision making under risk in Deal or No Deal." Journal of Applied Econometrics, 25(6): 987-1027.
25. Dohmen, Thomas, Armin Falk, David Huffman, Uwe Sunde, Jürgen Schupp, and Gert G. Wagner. Forthcoming. "Individual Risk Attitudes: Measurement, Determinants, and Behavioral Consequences." Journal of the European Economic Association.
26. Donkers, Bas, Bertrand Melenberg, and Arthur Van Soest. 2001. "Estimating Risk Attitudes Using Lotteries: A Large Sample Approach." Journal of Risk and Uncertainty, 22(2): 165-95.
27. Eliaz, Kfir, and Andrew Schotter. 2007. "Experimental Testing of Intrinsic Preferences for Noninstrumental Information." American Economic Review, 97(2): 166-69.
28. Epstein, Larry G., and Stanley E. Zin. 1989. "Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework." Econometrica, 57(4): 937-69.
29. Fehr, Ernst, and Lorenz Götte. 2007. "Do Workers Work More If Wages Are High? Evidence from a Randomized Field Experiment." American Economic Review, 97(1): 298-317.
30. Gächter, Simon, Eric J. Johnson, and Andreas Herrmann. 2007. "Individual-Level Loss Aversion in Riskless and Risky Choices." Institute for the Study of Labor Discussion Paper 2961.
31. Harless, David W., and Colin F. Camerer. 1994. "The Predictive Utility of Generalized Expected Utility Theories." Econometrica, 62(6): 1251-89.
32. Harrison, Glenn W., and E. Elisabet Rutström. 2009. "Expected Utility Theory and Prospect Theory: One Wedding and a Decent Funeral." Experimental Economics, 12(2): 133-58.
33. Harrison, Glenn W., Morten I. Lau, and E. Elisabet Rutström. 2007. "Estimating Risk Attitudes in Denmark: A Field Experiment." Scandinavian Journal of Economics, 109(2): 341-68. (Pubitemid 47343315)
34. Harrison, Glenn W., Morten I. Lau, and Melonie B. Williams. 2002. "Estimating Individual Discount Rates in Denmark: A Field Experiment." American Economic Review, 92(5): 1606-17.
35. Hey, John D., and Chris Orme. 1994. "Investigating Generalizations of Expected Utility Theory Using Experimental Data." Econometrica, 62(6): 1291-1326.
36. Holt, Charles A., and Susan K. Laury. 2002. "Risk Aversion and Incentive Effects." American Economic Review, 92(5): 1644-55.
37. Huck, Steffen, and Wieland Müller. 2007. "Allais for All: Revisiting the Paradox." http://else.econ.ucl.ac.uk/papers/uploaded/289. pdf.
38. Kahneman, Daniel, and Amos Tversky. 1979. "Prospect Theory: An Analysis of Decision under Risk." Econometrica, 47(2): 263-91.
39. Köbberling, Veronika, and Peter P. Wakker. 2005. "An Index of Loss Aversion." Journal of Economic Theory, 122(1): 119-31. (Pubitemid 40465092)
40. Kreps, David M., and Evan L. Porteus. 1978. "Temporal Resolution of Uncertainty and Dynamic Choice Theory." Econometrica, 46(1): 185-200.
41. Loomes, Graham. 2005. "Modeling the Stochastic Component of Behaviour in Experiments: Some Issues for the Interpretation of Data." Experimental Economics, 8(4): 301-23. (Pubitemid 41817826)
42. Loomes, Graham, and Robert Sugden. 1995. "Incorporating a Stochastic Element into Decision Theories." European Economic Review, 39(3-4): 641-48.
43. Loomes, Graham, Peter G. Moffatt, and Robert Sugden. 2002. "A Microeconometric Test of Alternative Stochastic Theories of Risky Choice." Journal of Risk and Uncertainty, 24(2): 103-30. (Pubitemid 37131158)
44. Lovallo, Dan, and Daniel Kahneman. 2000. "Living with Uncertainty: Attractiveness and Resolution Timing." Journal of Behavioral Decision Making, 13(2): 179-90.
45. Moffatt, Peter G. 2005. "Stochastic Choice and the Allocation of Cognitive Effort." Experimental Economics, 8(4): 369-88. (Pubitemid 41817829)
46. Noussair, Charles, and Ping Wu. 2006. "Risk Tolerance in the Present and the Future: An Experimental Study." Managerial and Decision Economics, 27(6): 401-12. (Pubitemid 44554002)
47. Pratt, John W. 1964. "Risk Aversion in the Small and in the Large." Econometrica, 32(1/2): 122-36.
48. Rabin, Matthew, and Georg Weizsäcker. 2009. "Narrow Bracketing and Dominated Choices." American Economic Review, 99(4): 1508-43.
49. Revelt, David, and Kenneth E. Train. 2001. "Customer-Specific Taste Parameters and Mixed Logit: Households' Choice of Electricity Supplier." http://ideas.repec.org/p/wpa/wawpem/0012001.html.
50. Spence, Michael, and Richard J. Zeckhauser. 1972. "The Effect of the Timing of Consumption Decisions and the Resolution of Lotteries on the Choice of Lotteries." Econometrica, 40(2): 401-03.
51. Starmer, Chris. 2000. "Developments in Non-Expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk." Journal of Economic Literature, 38(2): 332-82.
52. Starmer, Chris, and Nicholas Bardsley. 2005. "Introduction." Experimental Economics, 8(4): 295-99.
53. Train, Kenneth E. 2003. Discrete Choice Methods with Simulation. New York: Cambridge University Press.
54. Tversky, Amos, and Daniel Kahneman. 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty." Journal of Risk and Uncertainty, 5(4): 297-323.
55. van Winden, Frans, Michal Krawczyk and Astrid Hopfensitz. 2008. "Investment, Resolution of Risk, and the Role of Affect." Unpublished.
56. von Gaudecker, Hans-Martin, Arthur van Soest, and Erik Wengström. 2008. "Selection and Mode Effects in Risk Preference Elicitation Experiments." Institute for the Study of Labor Discussion Paper 3321.
57. von Neumann, John, and Oskar Morgenstern. 1947. Theories of Games and Economic Behavior. 2nd ed. Princeton, NJ: Princeton University Press.
58. Wakker, Peter, and Daniel Deneffe. 1996. "Eliciting von Neumann-Morgenstern Utilities when Probabilities are Distorted or Unknown." Management Science, 42(8): 1131-50. (Pubitemid 126549509)
59. Wu, George. 1999. "Anxiety and Decision Making with Delayed Resolution of Uncertainty." Theory and Decision, 46(2): 159-98. (Pubitemid 129575797)