Risk Taking in Mixed Gambles - HEC Paris - École des hautes études commerciales de Paris Access content directly
Preprints, Working Papers, ... Year : 2012

Risk Taking in Mixed Gambles

Abstract

We propose a task for eliciting attitudes towards risk that is close to real world risky decisions which typically involve gains and losses. The task consists of accepting or rejecting gambles that provide a gain with probability p and a loss with probability 1 − p. We employ finite mixture models to uncover heterogeneity in risk preferences and find that (i) behavior is heterogeneous, with slightly less than one half of the subjects behaving as expected utility maximizers, (ii) for the others, reference-dependent models perform better than those where subjects derive utility from final outcomes, (iii) models with sign dependent decision weights perform better than those without, and (iv) there is no evidence for loss aversion. The procedure is sufficiently simple so that it can be easily used in field or lab experiments where risk elicitation is not the main experiment.
No file

Dates and versions

hal-02058283 , version 1 (05-03-2019)

Licence

Copyright

Identifiers

Cite

Luís Santos-Pinto, Jose A. Mata, Thomas Astebro. Risk Taking in Mixed Gambles. 2012. ⟨hal-02058283⟩

Collections

HEC CNRS
15 View
0 Download

Altmetric

Share

Gmail Mastodon Facebook X LinkedIn More