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Consistency of Risk Preference Measures and the Role of Ambiguity: An Artefactual Field Experiment from China

Pan He (), Marcella Veronesi () and Stefanie Engel ()
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Pan He: ETH Zurich
Marcella Veronesi: Department of Economics (University of Verona)
Stefanie Engel: Institute for Environmental Decisions, ETH Zurich

No 03/2016, Working Papers from University of Verona, Department of Economics

Abstract: A variety of measures have been developed to elicit individual risk preferences. How these measures perform in the field, in particular in developing countries with non-student subjects, is still an open question. We implement an artefactual field experiment in rural China to investigate (i) consistency across incentivised experimental risk measures, (ii) consistency in risk preferences elicitation between non-incentivised survey measures and incentivised experiments, and (iii) possible explanations for risk preference inconsistency across measures. We find that inconsistent risk preferences across survey and experimental measures may be explained by ambiguity preferences. In the survey, subjects may mix risk and ambiguity preferences.

Keywords: risk preferences; ambiguity preferences; field experiments; socio-economic survey; China (search for similar items in EconPapers)
JEL-codes: C93 D81 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cbe, nep-cna, nep-exp, nep-tra and nep-upt
Date: 2016-03
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Published in Journal of Development Studies 2017 (doi: 10.1080/00220388.2017.1336542)

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