Risk Attitude and Market Behavior: Evidence from Experimental Asset Markets

Gerlinde Fellner () and Boris Maciejovsky ()

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: In this paperwe relate individual risk attitude as elicited by binary lotteries and certainty equivalents to market behavior. By analyzing 26 independent markets with a total of 280 participants we show that binary lottery choices and certainty equivalents are pootly correlated. Only lottery choices are related to market behavior: the higher the degree of risk aversion the lower the observed market activity. Females are more risk averse than males according to binary lotteries, submit fewer offers and engage less often in trades.

Keywords: Individual risk attitude; Gender differences; Binary lottery choices; Certainty equivalents; Experimental economics (search for similar items in EconPapers)
JEL-codes: C91 C92 D40 D80 G10 (search for similar items in EconPapers)
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Related works:
Journal Article: Risk attitude and market behavior: Evidence from experimental asset markets (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:esi:discus:2002-34

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