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A failed attempt to explain within subject variation in risk taking behavior using domain specific risk attitudes

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  • Deck, Cary
  • Lee, Jungmin
  • Reyes, Javier A.
  • Rosen, Christopher C.

Abstract

Previous research has found considerable variation in risk taking behavior within individuals across tasks. In this paper, we develop a hypothesis derived from the psychology literature that such apparently inconsistent behavior can be explained by a subject's domain specific risk attitudes. To test our hypothesis, we conducted a laboratory study using multiple paid risk elicitation tasks and a risk attitude survey. Consistent with previous research, our results indicated considerable within subject variation in behavior across tasks. However, we found little support for the hypothesis that this variation can be explained by domain specific risk attitudes.

Suggested Citation

  • Deck, Cary & Lee, Jungmin & Reyes, Javier A. & Rosen, Christopher C., 2013. "A failed attempt to explain within subject variation in risk taking behavior using domain specific risk attitudes," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 1-24.
  • Handle: RePEc:eee:jeborg:v:87:y:2013:i:c:p:1-24
    DOI: 10.1016/j.jebo.2012.11.010
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    1. repec:eee:joepsy:v:62:y:2017:i:c:p:17-32 is not listed on IDEAS
    2. Menkhoff, Lukas & Sakha, Sahra, 2017. "Estimating risky behavior with multiple-item risk measures," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 59-86.
    3. Crosetto, Paolo & Filippin, Antonio, 2017. "Safe Options Induce Gender Differences in Risk Attitudes," IZA Discussion Papers 10793, Institute for the Study of Labor (IZA).
    4. Roth, Benjamin & Trautmann, Stefan T. & Voskort, Andrea, 2016. "The role of personal interaction in the assessment of risk attitudes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 63(C), pages 106-113.
    5. Francesca Gioia, 2017. "Peer effects on risk behaviour: the importance of group identity," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 100-129, March.
    6. Bateman, Hazel & Dobrescu, Loretti I. & Newell, Ben R. & Ortmann, Andreas & Thorp, Susan, 2016. "As easy as pie: How retirement savers use prescribed investment disclosures," Journal of Economic Behavior & Organization, Elsevier, vol. 121(C), pages 60-76.
    7. Menkhoff, Lukas & Sakha, Sahra, 2014. "Multiple-item risk measures," Kiel Working Papers 1980, Kiel Institute for the World Economy (IfW).
    8. Dixit, Vinayak V. & Harb, Rami C. & Martínez-Correa, Jimmy & Rutström, Elisabet E., 2015. "Measuring risk aversion to guide transportation policy: Contexts, incentives, and respondents," Transportation Research Part A: Policy and Practice, Elsevier, vol. 80(C), pages 15-34.
    9. Subha Mani & Saurabh Singhal & Smriti Sharma & Utteeyo Dasgupta, 2016. "Eliciting risk preferences: Firefighting in the field," WIDER Working Paper Series 047, World Institute for Development Economic Research (UNU-WIDER).
    10. Pan He & Marcella Veronesi & Stefanie Engel, 2016. "Consistency of Risk Preference Measures and the Role of Ambiguity: An Artefactual Field Experiment from China," Working Papers 03/2016, University of Verona, Department of Economics.
    11. Jonathan Chapman & Pietro Ortoleva & Erik Snowberg & Colin Camerer & Mark Dean, 2017. "Willingness-To-Pay and Willingness-To-Accept are Probably Less Correlated than You Think," CESifo Working Paper Series 6492, CESifo Group Munich.
    12. Paolo Crosetto & Antonio Filippin, 2016. "A theoretical and experimental appraisal of four risk elicitation methods," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 613-641, September.
    13. repec:eee:joepsy:v:62:y:2017:i:c:p:186-203 is not listed on IDEAS
    14. Lönnqvist, Jan-Erik & Verkasalo, Markku & Walkowitz, Gari & Wichardt, Philipp C., 2015. "Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 254-266.
    15. Galizzi, Matteo M. & Machado, Sara R. & Miniaci, Raffaele, 2016. "Temporal stability, cross-validity, and external validity of risk preferences measures: experimental evidence from a UK representative sample," LSE Research Online Documents on Economics 67554, London School of Economics and Political Science, LSE Library.
    16. Hammond, Robert G. & Morrill, Thayer, 2016. "Personality traits and bidding behavior in competing auctions," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 39-55.

    More about this item

    Keywords

    Risk attitudes; Risk taking behavior; Personality traits; Laboratory experiments;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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