Year: 2009
Type: article
Abstract: Risk aversion experiments such as those by Holt and Laury (2002 and 2005) measure risk aversion by examining responses of experimental subjects who are confronted with single-sheet paper displays of probability-ordered arrays of choices in which “real” money is at risk. As an alternative to this approach, the findings reported in this paper were obtained using a modified adventure-type video game to offer the choices presented by the HL experiment embedded in a more realistic scenario. The decisions are confronted first by our experimental subjects in a sequential and unordered manner. Then, later in the experiment, subjects are instructed to examine the results of their decisions in an array that shares the simultaneous and probability-ordered characteristics of the standard laboratory protocol. Subjects then had the option of altering their decisions before their payment was determined. The results indicate that decisions made in a sequential and unordered manner exhibit less risk aversion and higher degrees of decision inconsistency.
Source: Journal of Finance Issues
Authors: Larry Lawson, Catherine Lawson
Institution: Missouri Western State University
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4320079573