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The effect of risk attitudes on search behavior: A laboratory search experiment

Author

Listed:
  • Takahiro Miura

    (Graduate School of Economics, Osaka University)

  • Keigo Inukai

    (Osaka University, ISER)

  • Masaru Sasaki

    (Graduate School of Economics, Osaka University. IZA.)

Abstract

This paper tests the effect of risk preferences on search activities by using a labo- ratory experiment. We used an infinite-horizon sequential search model with no recall in which an individual gains over search. We elicit the risk preferences from observed search activities of participants and from the multiple price list (MPL) method. We found the statistically significant effect of risk preferences elicited from the MPL method on the duration of search. The search duration is on average shorter for a risk averse individual than for risk loving one, which is consistent with the theoretical prediction. The significant effect of risk preferences on search activities has not been observed in the previous literature that used search model with recall in which an individual pays from the initial endowment over search (Schunk 2009, Schunk and Winter 2009). Therefore, the correlation between risk preferences and search activities depends on the type of search models.

Suggested Citation

  • Takahiro Miura & Keigo Inukai & Masaru Sasaki, 2017. "The effect of risk attitudes on search behavior: A laboratory search experiment," Discussion Papers in Economics and Business 17-17, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1717
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    More about this item

    Keywords

    Risk preference; Sequential search; MPL;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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