Investing versus gambling: experimental evidence of multi-domain risk attitudes
Economists have noted the empirical regularity that an individual's attitude towards risk is not constant across elicitation settings. Such a pattern is conceptually consistent with the argument in psychology that risk is domain specific. To explore this view, we frame a common risk elicitation tool in laboratory experiments as both a gambling game and an investment opportunity. A survey instrument used to measure one's attitudes towards risks on different domains is found to explain partially within-subject variation in observed behaviour between the two tasks. The evidence presented in this article demonstrates the need to consider more nuanced approaches to modelling risk.
Year of publication: |
2014
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Authors: | Deck, Cary ; Lee, Jungmin ; Reyes, Javier |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 21.2014, 1, p. 19-23
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Publisher: |
Taylor & Francis Journals |
Saved in:
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