On the role of monetary incentives in risk preference elicitation experiments

Andreas Hackethal, Michael Kirchler, Christine Laudenbach, Michael Razen and Annika Weber

No 286, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: Incentivized experiments in which individuals receive monetary rewards according to the outcomes of their decisions are regarded as the gold standard for preference elicitation in experimental economics. These task-related real payments are considered necessary to reveal subjects' \true preferences". Using a systematic, large-sample approach with three subject pools of private investors, professional investors, and students, we test the effect of task-related monetary incentives on risk preferences in four standard experimental tasks. We find no systematic differences in behavior between and within subjects in the incentivized and non-incentivized regimes. We discuss implications for academic research and for applications in the field.

Keywords: Risk Preferences; Incentives; Experimental Economics; Risk Aversion (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 (search for similar items in EconPapers)
Date: 2021, Revised 2021
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:286

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