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Repeated experience and consistent risk preferences

Author

Listed:
  • Charness, Gary
  • Chemaya, Nir

Abstract

Economists have developed various methods to elicit risk preferences, which can help forecast decision-making in risky scenarios. However, risk elicitation can be complex, and there remain unresolved challenges. Our research demonstrates that repeated exposure to risk elicitation tasks, such as the Holt-Laury and Eckel-Grossman tasks, results in individuals making more consistent decisions with less noise. This suggests that measuring risk preferences after individuals have gained experience and learning can yield more consistent outcomes and provide a more accurate representation of individual risk preferences.

Suggested Citation

  • Charness, Gary & Chemaya, Nir, 2023. "Repeated experience and consistent risk preferences," Economics Letters, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004007
    DOI: 10.1016/j.econlet.2023.111375
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    More about this item

    Keywords

    Risk preferences; Experience; Experimental methodology;
    All these keywords.

    JEL classification:

    • B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • 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
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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