Work

Attitudes Towards Risk: An Experiment

Year: 2003

Type: article

Abstract: The evaluations of a repeated lottery with and without the option to sell the second–stage lottery are compared theoretically and experimentally. Comparing individuals’ risk attitudes, we find that risk attitudes differ depending on the measure of risk attitude applied. We also find that subjects show low or no risk aversion, but put very high value on the opportunity to sell the lottery in the second stage of the decision problem. These findings cast doubts on the suitability of the random price mechanism for truthful revelation of willingness to pay in sequential decision problems.

Source: Metroeconomica

DOI: 10.1111/1467-999x.00161

Authors: Jürgen Eichberger, Werner Güth, Wieland Müller

Institutions: Heidelberg University, Humboldt-Universität zu Berlin, Max Planck Society, Max Planck Institute for Behavioral Economics, Libera Università Internazionale degli Studi Sociali Guido Carli, University of Vienna, Tilburg University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2161663820

FWCI: 0.54

Cites: 15

Cited by: 10

Related to: 10