EconPapers    
Economics at your fingertips  
 

Active and Passive Risk-Taking

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

Working Papers from Faculty of Economics and Statistics, University of Innsbruck

Abstract: Does risk-taking depend on whether risks result from an action (active risk-taking) or from not taking action (passive risk-taking)? Economic studies of risk mostly focus on active risk-taking, even though in many everyday decisions, risks result from remaining passive. It is unclear whether studying active risk-taking is informative for situations where risks result from passivity, considering theoretical arguments that suggest otherwise. We develop a new experimental risk-elicitation procedure, which we call the Lottery Adjustment Task (LAT) and employ it in 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 the existence of mode-of-choice effects when attention costs are absent, we find substantial evidence for mode-of-choice-effects in an online setting where decisions are spread out over 10 days and attention costs are thus a key feature of the decision.

Keywords: risk-taking; mode-of-choice; status quo effect; omission bias (search for similar items in EconPapers)
JEL-codes: D81 D91 C91 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2020-04
New Economics Papers: this item is included in nep-exp and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www2.uibk.ac.at/downloads/c4041030/wpaper/2020-04.pdf (application/pdf)

Related works:
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:inn:wpaper:2020-04

Access Statistics for this paper

More papers in Working Papers from Faculty of Economics and Statistics, University of Innsbruck Contact information at EDIRC.
Bibliographic data for series maintained by Janette Walde ().

 
Page updated 2020-05-22
Handle: RePEc:inn:wpaper:2020-04