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Experts in Experiments: How Selection Matters for Estimated Distributions of Risk Preferences

Hans-Martin von Gaudecker (), Arthur van Soest () and Erik Wengström ()

No 5575, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: An ever increasing number of experiments attempts to elicit risk preferences of a population of interest with the aim of calibrating parameters used in economic models. We are concerned with two types of selection effects, which may affect the external validity of standard experiments: Sampling from a narrowly defined population of students ("experimenter-induced selection") and self-selection of participants into the experiment. We find that both types of selection lead to a sample of experts: Participants perform significantly better than the general population, in the sense of fewer violations of revealed preference conditions. Self-selection within a broad population does not seem to matter for average preferences. In contrast, sampling from a student population leads to lower estimates of average risk aversion and loss aversion parameters. Furthermore, it dramatically reduces the amount of heterogeneity in all parameters.

Keywords: laboratory experiments; risk aversion; loss aversion; internet surveys (search for similar items in EconPapers)
JEL-codes: C90 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-upt
Date: 2011-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed

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Related works:
Journal Article: Experts in experiments (2012) Downloads
Working Paper: Selection and Mode Effects in Risk Preference Elicitation Experiments (2008) Downloads
Working Paper: Selection and Mode Effects in Risk Preference Elicitation Experiments (2008) Downloads
Working Paper: Selection and Mode Effects in Risk Preference Elicitation Experiments (2008)
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