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Salience, Risky Choices and Gender

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Author Info

  • Booth, Alison L.

    ()
    (Australian National University)

  • Nolen, Patrick J.

    ()
    (University of Essex)

Abstract

Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities. Recent theories suggest that probability weights vary depending on which portion of a risky environment is made salient. Using experimental data we show that salience affects young men and women differently, even after controlling for cognitive and non-cognitive skills. Men are significantly more likely than women to switch from a certain to a risky choice once the upside of winning is made salient, even though the expected value of the choice remains the same.

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File URL: http://ftp.iza.org/dp6400.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6400.

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Length: 11 pages
Date of creation: Feb 2012
Date of revision:
Publication status: published in: Economics Letters, 2012, 117 (2), 517 - 520
Handle: RePEc:iza:izadps:dp6400

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Related research

Keywords: cognitive ability; salience; risk-aversion; gender; probability weights;

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References

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  1. Booth, Alison L. & Nolen, Patrick J., 2009. "Gender Differences in Risk Behaviour: Does Nurture Matter?," IZA Discussion Papers 4026, Institute for the Study of Labor (IZA).
  2. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
  3. Booth, Alison & Cardona-Sosa, Lina & Nolen, Patrick, 2014. "Gender differences in risk aversion: Do single-sex environments affect their development?," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 126-154.
  4. Dohmen, Thomas J & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Are Risk Aversion and Impatience Related to Cognitive Ability?," CEPR Discussion Papers 6398, C.E.P.R. Discussion Papers.
  5. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  6. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
  7. Helga Fehr-Duda & Manuele Gennaro & Renate Schubert, 2006. "Gender, Financial Risk, and Probability Weights," Theory and Decision, Springer, vol. 60(2), pages 283-313, 05.
  8. Steffen Huck & Wieland Müller, 2012. "Allais for all: Revisiting the paradox in a large representative sample," Journal of Risk and Uncertainty, Springer, vol. 44(3), pages 261-293, June.
  9. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2010. "Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam," American Economic Review, American Economic Association, vol. 100(1), pages 557-71, March.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Salience, Risky Choices and Gender
    by Nicholas Gruen in Club Troppo on 2012-03-23 02:47:49
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Cited by:
  1. Booth, Alison L & Cardona Sosa, Lina & Nolen, Patrick, 2011. "Gender Differences in Risk Aversion: Do Single-Sex Environments Affect their Development?," CEPR Discussion Papers 8690, C.E.P.R. Discussion Papers.
  2. Rau, Holger A., 2014. "The disposition effect and loss aversion: Do gender differences matter?," Economics Letters, Elsevier, vol. 123(1), pages 33-36.

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