Eliciting Risk Preferences Using Choice Lists
David Freeman (),
Yoram Halevy () and
Terri Kneeland ()
Microeconomics.ca working papers from Vancouver School of Economics
We study the effect of embedding pairwise choices between lotteries within a choice list on measured risk attitude. Using an experiment with online workers, we find that subjects choose the risky lottery rather than a sure payment significantly more often when responding to a choice list. This behavior can be rationalized by the interaction between non-expected utility and the random incentive system, as suggested by Karni and Safra (1987).
Keywords: random incentive system; isolation; independence axiom; multiple price list; reduction of compound lotteries; preference reversals; certainty effect (search for similar items in EconPapers)
JEL-codes: D81 C91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2015-06-08, Revised 2018-01-09
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Journal Article: Eliciting risk preferences using choice lists (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2015-9
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