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Eliciting Risk Preferences Using Choice Lists

David Freeman (), Yoram Halevy () and Terri Kneeland ()

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: 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: C91 D81 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2015-06-08, Revised 2018-01-09
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

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Journal Article: Eliciting risk preferences using choice lists (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2015-9

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