Stability of risk preference parameter estimates within the Becker-DeGroot-Marschak procedure
AbstractThis paper reports new data from both selling and buying versions of the Becker-DeGroot-Marschak (BDM) procedure. First, when using the selling version of BDM, the cross-sectional mean of CRRA risk preference parameter estimates shifts from a value consistent with â€œas ifâ€ risk-seeking behavior in the early baseline to a value closer to â€œas ifâ€ risk neutrality in the late baseline. Second, when using the buying version of BDM, the cross-sectional mean of CRRA risk preference parameter estimates does not appear to change over time in a statistically significant manner. The cross-sectional mean from the late baseline of the buying version of BDM is closer to â€œas ifâ€ risk neutrality and to the late baseline estimates from the selling version of BDM than it is to either early baseline estimates from the selling version of BDM or typical estimates from the first price auction. Use of dominated offers is correlated with deviations from â€œas ifâ€ risk neutrality; this suggests the possibility that the early deviations from â€œas ifâ€ risk neutrality reflect errors. Copyright Economic Science Association 2007
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Experimental Economics.
Volume (Year): 10 (2007)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=102888
Risk; Expected utility; Learning;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James C. Cox & Vjollca Sadiraj, .
"Small- and Large-Stakes Risk Aversion: Implications of Concavity Calibration for Decision Theory,"
Experimental Economics Center Working Paper Series
2006-03, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
- Cox, James C. & Sadiraj, Vjollca, 2006. "Small- and large-stakes risk aversion: Implications of concavity calibration for decision theory," Games and Economic Behavior, Elsevier, vol. 56(1), pages 45-60, July.
- Matthew Rabin., 2000.
"Risk Aversion and Expected-Utility Theory: A Calibration Theorem,"
Economics Working Papers
E00-279, University of California at Berkeley.
- Matthew Rabin, 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Econometrica, Econometric Society, vol. 68(5), pages 1281-1292, September.
- Rabin, Matthew, 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Department of Economics, Working Paper Series qt731230f8, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Matthew Rabin, 2001. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Method and Hist of Econ Thought 0012001, EconWPA.
- Matthew Rabin, 2001. "Risk Aversion and Expected Utility Theory: A Calibration Theorem," Levine's Working Paper Archive 7667, David K. Levine.
- R. Isaac & Duncan James, 2000. "Robustness of the Incentive Compatible Combinatorial Auction," Experimental Economics, Springer, vol. 3(1), pages 31-53, June.
- Attiyeh, Greg & Franciosi, Robert & Isaac, R Mark, 2000. " Experiments with the Pivot Process for Providing Public Goods," Public Choice, Springer, vol. 102(1-2), pages 95-114, January.
- Harrison, Glenn W, 1990. "Risk Attitudes in First-Price Auction Experiments: A Bayesian Analysis," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 541-46, August.
- Berg, Joyce E, et al, 1986. "Controlling Preferences for Lotteries on Units of Experimental Exchange," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 281-306, May.
- R. Mark Isaac & Duncan James, 2000. "Asset Markets: How They Are Affected by Tournament Incentives for Individuals," American Economic Review, American Economic Association, vol. 90(4), pages 995-1004, September.
- Cox, James C. & Isaac, R. Mark, 2008. "Procurement Contracting," Handbook of Experimental Economics Results, Elsevier.
- Isaac, R Mark & James, Duncan, 2000. " Just Who Are You Calling Risk Averse?," Journal of Risk and Uncertainty, Springer, vol. 20(2), pages 177-87, March.
- Cox, James C & Smith, Vernon L & Walker, James M, 1988. " Theory and Individual Behavior of First-Price Auctions," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 61-99, March.
- Robert Dorsey & Laura Razzolini, 2003. "Explaining Overbidding in First Price Auctions Using Controlled Lotteries," Experimental Economics, Springer, vol. 6(2), pages 123-140, October.
- Annamaria Fiore & M. Vittoria Levati & Andrea Morone, 2006.
"Voluntary contributions with imperfect information: An experimental study,"
Papers on Strategic Interaction
2006-30, Max Planck Institute of Economics, Strategic Interaction Group.
- M. Levati & Andrea Morone & Annamaria Fiore, 2009. "Voluntary contributions with imperfect information: An experimental study," Public Choice, Springer, vol. 138(1), pages 199-216, January.
- Kocher, Martin G. & Pahlke, Julius & Trautmann, Stefan T., 2013.
"Tempus Fugit: Time pressure in risky decisions,"
Munich Reprints in Economics
18174, University of Munich, Department of Economics.
- Cotten, Stephen J. & Santore, Rudy, 2012. "Contingent fee caps, screening, and the quality of legal services," International Review of Law and Economics, Elsevier, vol. 32(3), pages 317-328.
- John D. Hey & Andrea Morone & Ulrich Schmidt, 2007.
"Noise and Bias in Eliciting Preferences,"
Kiel Working Papers
1386, Kiel Institute for the World Economy.
- Lisa Anderson & Jennifer Mellor, 2009.
"Are risk preferences stable? Comparing an experimental measure with a validated survey-based measure,"
Journal of Risk and Uncertainty,
Springer, vol. 39(2), pages 137-160, October.
- Lisa R. Anderson & Jennifer M. Mellor, 2008. "Are Risk Preferences Stable? Comparing an Experimental Measure with a Validated Survey-Based Measure," Working Papers 74, Department of Economics, College of William and Mary.
- Evans, Mary F. & Vossler, Christian A. & Flores, Nicholas E., 2009. "Hybrid allocation mechanisms for publicly provided goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 311-325, February.
- Stefan Zeisberger & Dennis Vrecko & Thomas Langer, 2012. "Measuring the time stability of Prospect Theory preferences," Theory and Decision, Springer, vol. 72(3), pages 359-386, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.