THE EFFECT OF AN ADDITIONAL ALTERNATIVE ON MEASURED RISK PREFERENCES IN A LABORATORY EXPERIMENT IN PERU

Jim Engle-Warnick (), Javier Escobal and Sonia Laszlo

Departmental Working Papers from McGill University, Department of Economics

Abstract: We experimentally test for the effect of an additional alternative on the measured risk preferences of farmers in rural Peru. In our experiment, subjects revealed their risk was always dominated by one of the two existing gambles. We found that subjects chose this gamble nearly one quarter of the time, in some cases causing the subjects to appear to be more risk loving. We found that subjects in a traditional laboratory environment did not choose the dominated gamble, but their choices were affected by its presence.

JEL-codes: C91 O18 O33 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-09
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Effect of an Additional Alternative on Measured Risk Preferences in a Laboratory Experiment in Peru (2006)
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