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Should I Play or Should I Go? Individuals’ Characteristics and Preference for Uncertainty

Author

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  • Tânia Saraiva

    (ISCAL—Lisbon Accounting and Business School, 1069-035 Lisbon, Portugal)

  • Tiago Cruz Gonçalves

    (ISEG Lisbon School of Economics & Management, Universidade de Lisboa, Advance/CSG, 1200-781 Lisbon, Portugal)

Abstract

This paper presents an incentivized experiment analyzing the role of demographic characteristics in individual decision-making under uncertainty. Reactions to a natural source of uncertainty, payoffs in a TV game show, were measured using Fuzzy-set Qualitative Comparative Analysis (fsQCA), allowing us to identify multiple configurations of causal conditions that are sufficient for individuals to prefer an uncertain payoff to a sure gain, and, thus, lower risk aversion. This paper found evidence of preference for uncertainty, measured as willingness to play for an uncertain payoff, in individuals with characteristics most commonly present in the literature: being male; young; childless; with studies in finance or similar areas. This paper also shows that conditions that would not justify the preference for uncertainty according to the literature (an older individual or having children), when combined with other conditions, change contestants’ behavior regarding preference for uncertainty. Individuals that are both older and single, and individuals that have children combined with education in finance, show an inverse effect on preference for uncertainty.

Suggested Citation

  • Tânia Saraiva & Tiago Cruz Gonçalves, 2022. "Should I Play or Should I Go? Individuals’ Characteristics and Preference for Uncertainty," Games, MDPI, vol. 13(2), pages 1-14, April.
    • Handle: RePEc:gam:jgames:v:13:y:2022:i:2:p:31-:d:793028
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