We examine whether prior exposure to environments with varying degrees of risk affects individuals' risk-taking behavior. In a laboratory setting, subjects were first exposed to high, moderate, or low-risk environments. We then elicited their risk aversion based on their decisions on an...

We examine whether prior exposure to environments with a varying degree of risk affects individuals’ risk-taking behavior. Using a laboratory experiment, we find that subjects exposed to a high risk environment exhibit higher levels of risk aversion than those who were exposed to a moderate or...