Eliciting individual risk attitudes – different procedures, different findings
Sven Gruener (),
Norbert Hirschauer () and
No 7bwyq, SocArXiv from Center for Open Science
We compare three procedures for eliciting individual risk attitudes: Holt-and-Laury (2002), Eckel-and-Grossman (2002), and the general willingness-to-take-risks question of the German socio-economic panel (Dohmen et al. 2011). Using a within-subject design, we carry out a classroom experiment with students who are enrolled in the degree programs Physics, Computer Sciences, Agricultural Sciences, Law, and History. We find that the risk attitudes as measured by the three procedures diverge substantially. This poses a serious challenge to the validity of these measurement instruments. Reconnoitering the room for improvement in the elicitation of risk atti-tudes, we discuss potential reasons for this divergence such as flawed design, overhasty interpretations, and confusion on the conceptual level.
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