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Measuring time and risk preferences: Reliability, stability, domain specificity

E.M. Wölbert and Arno Riedl
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E.M. Wölbert: General Economics 1 (Micro)

No 41, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: To accurately predict behavior economists need reliable measures of individual time preferences and attitudes toward risk and typically need to assume stability of these characteristics over time and across decision domains. We test the reliability of two choice tasks for eliciting discount rates, risk aversion, and probability weighting and assess the stability of these characteristics over time and across situations. We find high reliability and that individual characteristics are remarkably stable over time. The estimated parameters correlate well with self-reported decisions in financial domains, but are largely uncorrelated with decisions in other important life domains involving intertemporal trade-offs and risk.

New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2013-01-01
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Working Paper: Measuring Time and Risk Preferences: Realiability, Stability, Domain Specificity (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2013041

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