The formation of risk preferences through small-scale events

Silvia Angerer, E. Dutcher, Daniela Glätzle-Rützler, Philipp Lergetporer () and Matthias Sutter ()
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Silvia Angerer: UMIT ? Private University for Health Sciences, Medical Informatics and Technology
Philipp Lergetporer: Technical University of Munich & ifo Institute at the University of Munich and CESifo

Munich Papers in Political Economy from Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich

Abstract: Large, macroeconomic shocks in the past have been shown to influence economic decisions in the present. We study in an experiment with 743 subjects whether small-scale, seemingly negligible, events also affect the formation of risk preferences. In line with a reinforcement learning model, we find that subjects who won a random lottery took significantly more risk in a second lottery almost a year later. The same pattern emerges in another experiment with 136 subjects where the second lottery was played more than three years after the first lottery. So, small-scale, random, events affect the formation of risk preferences significantly

Keywords: Reinforcement learning; risk preferences; preference formation; experiment (search for similar items in EconPapers)
JEL-codes: C91 D01 D83 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-09
New Economics Papers: this item is included in nep-exp and nep-isf
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https://cms.mgt.tum.de/fileadmin/mgt.tum.de/facult ... paper_2021-08-20.pdf

Related works:
Working Paper: The Formation of Risk Preferences through Small-Scale Events (2021)
Working Paper: The formation of risk preferences through small-scale events (2021)
Working Paper: The Formation of Risk Preferences through Small-Scale Events (2021)
Working Paper: The Formation of Risk Preferences Through Small-Scale Events (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:aiw:wpaper:14

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