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An Empirical Analysis of Choices Between Gambles of Children and Adults in China

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  • Jie Zhang

    (Lancaster University)

  • Ivan Paya

    (Lancaster University)

  • David Peel

    (Lancaster University)

Abstract

In a unique study Harbaugh, Krause and Vesterlund (2002), reported the interesting result that children exhibit different probability weighting to adults. In particular, children underweighted small probabilities. An objective of this paper is to re-examine this issue employing children respondents from a different ethnic background. Overall, our results for Chinese children (age 4-6) are broadly consistent with those of Harbaugh, Krause and Vesterlund (2002) in that over a range of low probabilities they appear to underweight small probabilities though not for the smallest probabilities. The outcomes for Chinese high school students, aged 11-14, are similar to those for children in some respects and broadly consistent with the results reported by Harbaugh, Krause and Vesterlund (2002). Our results for Chinese adults (age 20-57) are not consistent with the results reported for Western respondents but are consistent with those reported for some non-western respondents.

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Bibliographic Info

Article provided by University of Buckingham Press in its journal Journal of Gambling Business and Economics.

Volume (Year): 4 (2010)
Issue (Month): 1 (March)
Pages: 1-18

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Handle: RePEc:buc:jgbeco:v:4:y:2010:i:1:p:1-18

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Related research

Keywords: PROBABILITY WEIGHTING; CHILDREN; RISK;

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References

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  1. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  2. Drazen Prelec, 1998. "The Probability Weighting Function," Econometrica, Econometric Society, vol. 66(3), pages 497-528, May.
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  9. William Harbaugh & Kate Krause & Lise Vesterlund, 2002. "Risk Attitudes of Children and Adults: Choices Over Small and Large Probability Gains and Losses," Experimental Economics, Springer, vol. 5(1), pages 53-84, June.
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