Preference for control affects investment behavior. Participants of laboratory experiments invest different amount of money in a risky asset when face with two different methods of control which have identical payoff structure and probability distribution, but provide different sense of control....

Economics and management science share the tradition of ordering risk aversionby fitting the best expected utility (EU) model with a certain utility function to in-dividual data, and then using the utility curvature for each individual as the soleindex of risk attitude. (Cumulative) Prospect...

Loss aversion can occur in riskless and risky choices. Yet, there is no evidence whetherpeople who are loss averse in riskless choices are also loss averse in risky choices. Wemeasure individual-level loss aversion in riskless choices in an endowment effect experimentby eliciting both WTA and...

The literature on social preferences provides overwhelming evidence of departuresfrom pure self-interest of individuals. Experiments show that people care about others’well-being and their relative standing. This paper investigates whether this type ofbehavior persists when risk comes into...

In the framework of expected utility theory, risk attitudes are entirely capturedby the curvature of the utility function. In cumulative prospect theory (CPT) riskattitudes have an additional dimension: the weighting of probabilities. With thismodication, one question arises naturally: since...

In this paper we experimentally test skewness seeking at the individuallevel. Several prospects that can be ordered with respect to the third-degreestochastic dominance (3SD) criterion are ranked by the participants of theexperiment. We find that the skewness of a distribution has a...

Contrary to the models of deterministic life cycle saving, we take itfor granted that uncertainty of one's future is the essential problem ofsaving decisions. However, unlike the stochastic life cycle models, we capturethis crucial uncertainty by a non-Bayesian scenario-based...

This experimental study, first, compares the individual valuations of two risk reduction mechanisms: self-insurance and self-protection. Second, it investigates these valuations when the loss amount is ambiguous, and compare these values with valuations when loss amounts are known. results...

The study investigates protective responses in low probability and high loss risk situations.Particularly, it (1) detects individual protection valuations to variations in probability versus tovariations in loss for payment decisions and choice decisions, (2) elicits the thresholdprobability in...

This experimental study investigates whether individuals preferbounded rationality over rational choice theory when facing simpleinvestment tasks. First, participants state some personal parametersthat serve as an input to render a theoretical approach, namelysatisficing or optimality,...