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Active and Passive Risk-Taking

Christian König-Kersting (), Johannes Lohse and Anna Louisa Merkel ()

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: Risk-taking may depend on whether risks result from an action (active risk-taking) or from not taking action (passive risk-taking). We develop a new experimental risk-elicitation procedure, the Dynamic Lottery Adjustment Task, and employ it across two separate experiments to study the size and direction of potential mode-of-choice effects (i.e. differences in risk-taking between active and passive decision modes). While our tightly controlled lab study provides little evidence for such effects, we find substantial evidence for mode-of-choice effects when decisions are spread out over 10 days and attention costs are a key feature of the online choice environment we use.

Keywords: risk-taking; mode-of-choice; passive decision making; attention costs (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2020-04
New Economics Papers: this item is included in nep-exp and nep-ore
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