Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)
Stephanie Wang and
No 7262, CESifo Working Paper Series from CESifo Group Munich
We introduce DOSE - Dynamically Optimized Sequential Experimentation - and use it to estimate individual-level loss aversion in a representative sample of the U.S. population (N = 2,000). DOSE elicitations are more accurate, more stable across time, and faster to administer than standard methods. We find that around 50% of the U.S. population is loss tolerant. This is counter to earlier findings, which mostly come from lab/student samples, that a strong majority of participants are loss averse. Loss attitudes are correlated with cognitive ability: loss aversion is more prevalent in people with high cognitive ability, and loss tolerance is more common in those with low cognitive ability. We also use DOSE to document facts about risk and time preferences, indicating a high potential for DOSE in future research.
Keywords: dynamic experiments; DOSE; loss aversion; risk preferences; time preferences (search for similar items in EconPapers)
JEL-codes: C81 C90 D81 D90 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-upt
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