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Risk Attitude and Market Behavior: Evidence from Experimental Asset Markets

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  • Gerlinde Fellner

    ()

  • Boris Maciejovsky

    ()

Abstract

In this paperwe relate individual risk attitude as elicited by binary lotteries and certainty equivalents to market behavior. By analyzing 26 independent markets with a total of 280 participants we show that binary lottery choices and certainty equivalents are pootly correlated. Only lottery choices are related to market behavior: the higher the degree of risk aversion the lower the observed market activity. Females are more risk averse than males according to binary lotteries, submit fewer offers and engage less often in trades.

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Bibliographic Info

Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2002-34.

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Length: 26 pages
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Handle: RePEc:esi:discus:2002-34

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Keywords: Individual risk attitude; Gender differences; Binary lottery choices; Certainty equivalents; Experimental economics;

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