Risk Taking, Intertemporal Choice, and Loss Aversion

Robert Oxoby

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: We report on two laboratory experiments testing for the presence of loss aversion, separate from risk aversion, in decisions involving risk and intertemporal choice. Both experiments utilize an asset legitimacy protocol to control for ‘house money’ effects. In our first experiment, we augment the Holt-Laury risk preference elicitation protocol to address the effects of loss aversion. In our second experiment, we explore loss aversion using a discount rate elicitation protocol that controls for risk preferences. Our results show that loss aversion can be separated from risk preferences and has a profound effect in decision-making.

JEL-codes: C91 D91 (search for similar items in EconPapers)
Pages: 26
Date: 2016-07-01, Revised 2016-07-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Note: LCERPA Working Paper No. 2016-1
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Persistent link: https://EconPapers.repec.org/RePEc:wlu:lcerpa:0096

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