Using involvement to reduce inconsistencies in risk preference elicitation

Manuela Meraner, Oliver Musshoff and Robert Finger

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2018, vol. 73, issue C, 22-33

Abstract: Empirical research aiming to elicit risk attitudes faces problems of within- and between-method inconsistencies, which reduce the explanatory and predictive power of risk research. In this paper, we investigate the relevance of context and task involvement on these inconsistencies. Our analysis is based on a sample of 244 German agricultural sciences students, which were performing an iterative multiple price list (iMPL) and a simple self-assessment question on risk preferences. We find that using a real life and subject context specific (here, agricultural) framing of the iMPL is leading to fewer within- and between-method inconsistencies. This is due to the fact that contextual framing has an increasing effect on task involvement (proxied with the time spent in the iMPL). Additionally, we find that contextual framing triggers the role of subjects’ context involvement (proxied using an indicator for students’ involvement in the agricultural domain). More specifically, both higher task and context involvement are found to decrease within-method inconsistency in the iMPL task. While also between-method inconsistency is decreasing in subjects’ task involvement, we found no effect of context involvement. In conclusion, our results suggest that by framing a risk elicitation method according to the subjects’ specific context, involvement can be triggered and inconsistencies and misspecifications can be reduced.

Keywords: Between- and within-method inconsistencies; Risk preference elicitation; Involvement (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214804318300090
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:73:y:2018:i:c:p:22-33

DOI: 10.1016/j.socec.2018.01.001

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().