Risk Aversion in the Large and in the Small

Estimates of agents' risk aversion differ between market studies and experimental studies. We demonstrate that the estimates can be reconciled through consistent treatment of agents' tendency for narrow framing, regarding integration of background wealth as well as across risky outcomes: Risk aversion is similar whenever similar degrees of narrow framing is assumed in either setting.

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Year of publication:	2011-06-28
Authors:	Haug, Jørgen ; Hens, Thorsten ; Wöhrmann, Peter
Institutions:	Institutt for foretaksøkonomi, Norges Handelshøyskole (NHH)
Subject:	Risk aversion \| narrow framing \| background wealth \| laboratory experiments \| market studies \| equity premium puzzle

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series Discussion Papers Number 2011/12 18 pages
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; G11 - Portfolio Choice ; G12 - Asset Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009320815