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Moderate stake variations for risk and uncertainty, gains and losses: Methodological implications for comparative studies

  • Vieider, Ferdinand M.
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    Risk attitudes are known to be sensitive to large stake variations. However, little is known on the sensitivity to moderate variations in stakes. This is important for studies that want to compare risk attitudes between countries or over time. I find that variations of ±20% affect only utility, while larger variations may affect also probability weighting. Surprisingly, the effect on weighting functions is larger for losses than for gains. It is also more pronounced for risk than for uncertainty.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0165176511005416
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    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 117 (2012)
    Issue (Month): 3 ()
    Pages: 718-721

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    Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:718-721
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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    8. Nathalie Etchart-Vincent & Olivier L'Haridon, 2011. "Monetary incentives in the loss domain and behavior toward risk: An experimental comparison of three reward schemes including real losses," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00742027, HAL.
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    14. Hans Binswanger, 1980. "Attitudes toward risk: Experimental measurement in rural india," Artefactual Field Experiments 00009, The Field Experiments Website.
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