Experiments on bivariate risk preferences

Sebastian Ebert and Gijs Kuilen

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: We study cross-risk preferences over wealth and two other attributes to obtain theory-free evidence on correlation aversion as well as higher-order cross-traits like cross-prudence and cross-temperance. Two experiments elicit the dependence structure of risk preferences between wealth and, respectively, waiting time and someone else's wealth. The latter experiment, which could be called ``risk preferences for you, me, and us'', connects bivariate risk preferences with (higher-order) inequality aversion. This first systematic exploration of bivariate risk attitudes helps assess the appropriateness of assumptions in economic models on health prevention, inequality, saving, or insurance.

JEL-codes: C90 D01 D81 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:113055

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