EconPapers    
Economics at your fingertips  
 

Cognitive Resource Depletion, Choice Consistency, and Risk Preferences

Marco Castillo (), David Dickinson and Ragan Petrie

No 12-04, Working Papers from Department of Economics, Appalachian State University

Abstract: We investigate the consistency and stability of individual risk preferences by slightly manipulating the cognitive resources of subjects through sleepiness. Participants are recruited and randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time of day (circadian mismatched). For the decision task, subjects and are asked to choose how much to allocate between two state-dependent assets (using the Choi et al., 2007, design). We have two main findings. First, the consistency of behavior for circadian matched and mismatched subjects is statistically the same. This is true whether it is (nonparametrically) defined as consistency with GARP, payoff dominance, expected utility, disappointment aversion or cumulative prospect theory. Second, while our cognitive resource manipulation yields no difference in consistency of behavior, it results in an increased tendency to take risk. Our experiment confirms theoretical predictions that preferences are consistent yet state-dependent. Key Words:

Date: 2012
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-neu and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://econ.appstate.edu/RePEc/pdf/wp1204.pdf (application/pdf)

Related works:
Working Paper: Cognitive Resource Depletion, Choice Consistency, and Risk Preferences (2012) Downloads
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:apl:wpaper:12-04

Access Statistics for this paper

More papers in Working Papers from Department of Economics, Appalachian State University Contact information at EDIRC.
Bibliographic data for series maintained by O. Ashton Morgan ().

 
Page updated 2024-07-20
Handle: RePEc:apl:wpaper:12-04