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We propose a nonparametric revealed preference test to identify heterogeneity in risk preference. Our method is simple and applicable to choice environments with revealed preference features. We further develop two measures of preference heterogeneity at both the individual and group levels, and...
Persistent link: https://www.econbiz.de/10013321440
In this paper, we provide an explanation for why risk taking is related to optimism. Using a laboratory experiment, we … optimism is related to elicited parameters of rank dependent utility theory suggesting that focusing may be among the …
Persistent link: https://www.econbiz.de/10013470547
In this paper I introduce a concept of simple strategy and de fine three kinds of such strategies. For three classes of utility functions - CARA, DARA and CRRA I state and prove equivalent characterizations in terms of the corresponding simple strategy characteristics and the corresponding...
Persistent link: https://www.econbiz.de/10014039651
We replicate the essentials of the Huettel et al. (2006) experiment on choice under uncertainty with 30 Yale …
Persistent link: https://www.econbiz.de/10014189074
The elicitation of the elasticity of intertemporal substitution (EIS), discount factor, and risk attitude parameters is of central importance to economics, finances and public policy. This paper jointly elicits and estimates these parameters using experimental data. We employ a new model based...
Persistent link: https://www.econbiz.de/10013228702
Ambiguity aversion has shown to be economically relevant and has been proposed as an explanation for many phenomena in economics and finance. While the literature has suggested a large variety of elicitation methods to measure ambiguity preferences, their consistency and reliability it is rarely...
Persistent link: https://www.econbiz.de/10010490651
We test whether the binary lottery procedure makes subjects behave as if they are risk neutral in the Holt-Laury and Eckel-Grossman tasks. Depending on the task we find that at most a third of subjects behave as if risk neutral. In fact, when we compare the distribution of choices we find no...
Persistent link: https://www.econbiz.de/10012007430
To accurately predict behavior economists need reliable measures of individual time preferences and attitudes toward risk and typically need to assume stability of these characteristics over time and across decision domains. We test the reliability of two choice tasks for eliciting discount...
Persistent link: https://www.econbiz.de/10013072892
We study how taxes and subsidies affect portfolio choices in a laboratory experiment. We find highly significant … the baseline experiment and find our main result to be largely robust. However, as we reduce the number of states of …
Persistent link: https://www.econbiz.de/10013054137
experiment. First, a model is analyzed in which two agents simultaneously decide between a risky and a safe strategy and we allow …
Persistent link: https://www.econbiz.de/10013325296