The Effect of an Additional Alternative on Measured Risk Preferences in a Field Experiment
Jim Engle-Warnick (),
Javier Escobal and
Sonia Laszlo ()
Experimental from EconWPA
We experimentally test for the effect of an additional alternative on the measured risk preferences of farmers in rural Peru. In our experiment, subjects revealed their risk preferences with a series of choices between two gambles. We added a third gamble, which was always dominated by one of the two existing gambles. We found that subjects chose this gamble nearly one quarter of the time, in some cases causing them to appear more risk loving. We conclude that the number of available alternatives should be taken into account for predicting decisions under uncertainty.
Keywords: risk preferences; risk measurement instruments; experimental economics; field experiments (search for similar items in EconPapers)
JEL-codes: C91 C93 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Note: Type of Document - pdf; pages: 30
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpex:0511003
Access Statistics for this paper
More papers in Experimental from EconWPA
Series data maintained by EconWPA ().