This note presents an experimental study of the random lottery incentive mechanism. In the baseline treatment we observe risk behavior in a given choice problem. We show that by integrating a second, asymmetrically dominated choice problem in a random incentive mechanism risk behavior can be...

In the context of eliciting preferences for decision making under risk, we ask the question: which might be the 'best' method for eliciting such preferences?ʺ. It is well known that different methods differ in terms of the bias in the elicitation; it is rather less well-known that different...

Standard economic theory assumes that individual risk taking decisions are independent from the social context. Recent experimental evidence however shows that the income of peers has a systematic impact on observed degrees of risk aversion. In particular, subjects strive for balance in the...