Risk Taking and Skewness Seeking Behavior in a Demographically Diverse Population*

Douadia Bougherara, Lana Friesen and Celine Nauges

No 650, Discussion Papers Series from University of Queensland, School of Economics

Abstract: We study the interaction between risk taking and skewness seeking behavior among the French population using an experiment that elicits certainty equivalent over lotteries that vary the second and third moments orthogonally. We find that the most common behavior is risk avoidance and skewness seeking. On average, we find no interaction between the two, and a weakly significant interaction only in some segments of the population. That is, in most cases, skewness seeking is not affected by the variance of the lotteries involved, nor is risk taking affected by the skewness of the lotteries. We also find a significant positive correlation between risk avoiding and skewness seeking behavior. Older and female participants make more risk avoiding and more skewness seeking choices, while less educated people and those not in executive occupations are more skewness seeking.

Keywords: Risk; Skewness; Certainty Equivalent; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 G11 G22 (search for similar items in EconPapers)
Date: 2021-11-25
New Economics Papers: this item is included in nep-cbe, nep-cwa, nep-exp and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Risk-taking and skewness-seeking behavior in a demographically diverse population (2022)
Working Paper: Risk-taking and skewness-seeking behavior in a demographically diverse population (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:650

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