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Does risk attitude depend on whether risk is predetermined

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  • Wang, Di

Abstract

We identify experimentally a decision-making phenomenon pertaining to pre-decision determination of uncertainty to be revealed after choice. Consequentially speaking, as long as the uncertainty resolution associated with a lottery is revealed only after choice, it should not matter whether this uncertainty is predetermined. We find that the pre-decision determination of risk has an impact on risk attitude. Specifically, subjects are less risk-averse under predetermined risk than under future-determined risk where uncertainty is resolved and revealed after decision-making. Based on the ideas of uncertainty perception and source preference, we offer a brief discussion on possible accounts for the non-neutrality towards predetermined uncertainty.

Suggested Citation

  • Wang, Di, 2025. "Does risk attitude depend on whether risk is predetermined," Economics Letters, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525002551
    DOI: 10.1016/j.econlet.2025.112418
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    References listed on IDEAS

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