On the role of monetary incentives in risk preference elicitation experiments

Andreas Hackethal, Michael Kirchler (), Christine Laudenbach, Michael Razen and Annika Weber
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Andreas Hackethal: Goethe University Frankfurt and Leibniz Institute for Financial Research SAFE
Michael Kirchler: University of Innsbruck
Christine Laudenbach: University of Bonn
Michael Razen: University of Innsbruck
Annika Weber: Goethe University Frankfurt and Leibniz Institute for Financial Research SAFE

Journal of Risk and Uncertainty, 2023, vol. 66, issue 2, No 4, 189-213

Abstract: 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 significant differences in behavior between and within subjects in the incentivized and non-incentivized regimes. We discuss implications for academic research and forions in the field.

Keywords: Risk preferences; Incentives; Experimental economics; Risk aversion; C91; D01; D81 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11166-022-09377-w

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