IDEAS home Printed from https://ideas.repec.org/a/eee/reecon/v63y2009i4p282-295.html
   My bibliography  Save this article

Lab and framed lab versus natural experiments: Evidence from a risky choice experiment

Author

Listed:
  • Botti, Fabrizio
  • Conte, Anna
  • Di Cagno, Daniela
  • D'Ippoliti, Carlo

Abstract

Some recent papers have studied data from TV game shows to examine the behaviour of individuals towards risk. It is generally agreed that data from these shows are useful in detecting individual risk aversion in the field, with both "real life" subjects and incentives. Field experiments also include some interesting reality features that could affect individuals' behaviour and possibly lead to different findings. This paper aims at investigating lab versus field evidence in risk taking attitudes, especially controlling for framing effects. To assess whether the behaviour of subjects in the field is consistent with that of experimental subjects, we designed an experiment to mimic (with experimental rewards and subjects) the rules of a well-known Italian TV game show, Affari Tuoi, in two different settings: a traditional lab setting, where the game was played individually (109 subjects) (Treatment 1); and a framed lab, in which the experiment was replicated in the Italian public television (RAI) studio where the show was actually recorded, with a smaller sample of undergraduate students (33) and in the presence of an audience (Treatment 2). Our comparison between the two different settings aims at establishing whether the presence of an audience, or of a situation that reproduces the stress that contestants must experience in the TV studio, can affect experimental subjects' choices. We did not find any significant evidence of framing effects: students behave in a similar way in the two lab settings, responding essentially to incentives. Comparing the risk attitudes shown by experimental subjects in the two lab treatments with those exhibited by the contestants in the field, we found that contestants in the TV show are generally more risk averse than students in the lab.

Suggested Citation

  • Botti, Fabrizio & Conte, Anna & Di Cagno, Daniela & D'Ippoliti, Carlo, 2009. "Lab and framed lab versus natural experiments: Evidence from a risky choice experiment," Research in Economics, Elsevier, vol. 63(4), pages 282-295, December.
    • Handle: RePEc:eee:reecon:v:63:y:2009:i:4:p:282-295
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090-9443(09)00037-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thierry Post & Martijn J. van den Assem & Guido Baltussen & Richard H. Thaler, 2008. "Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show," American Economic Review, American Economic Association, vol. 98(1), pages 38-71, March.
    2. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    3. Matthew Rabin., 2000. "Diminishing Marginal Utility of Wealth Cannot Explain Risk Aversion," Economics Working Papers E00-287, University of California at Berkeley.
    4. Peter Moffatt & Simon Peters, 2001. "Testing for the Presence of a Tremble in Economic Experiments," Experimental Economics, Springer;Economic Science Association, vol. 4(3), pages 221-228, December.
    5. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    6. Roger Hartley & Gauthier Lanot & Ian Walker, 2014. "Who Really Wants To Be A Millionaire? Estimates Of Risk Aversion From Gameshow Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(6), pages 861-879, September.
    7. Beetsma, Roel M W J & Schotman, Peter C, 2001. "Measuring Risk Attitudes in a Natural Experiment: Data from the Television Game Show Lingo," Economic Journal, Royal Economic Society, vol. 111(474), pages 821-848, October.
    8. Anna Conte & Peter G. Moffatt & Fabrizio Botti & Daniela T. Di Cagno & Carlo D’Ippoliti, 2012. "A test of the rational expectations hypothesis using data from a natural experiment," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4661-4678, December.
    9. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    10. Metrick, Andrew, 1995. "A Natural Experiment in "Jeopardy!"," American Economic Review, American Economic Association, vol. 85(1), pages 240-253, March.
    11. Robert Gertner, 1993. "Game Shows and Economic Behavior: Risk-Taking on "Card Sharks"," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(2), pages 507-521.
    12. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
    13. Botti Fabrizio & Conte Anna & Di Cagno Daniela Teresa & D'Ippoliti Carlo, 2008. "Risk Attitude in Real Decision Problems," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-32, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anna Conte & Peter G. Moffatt & Fabrizio Botti & Daniela T. Di Cagno & Carlo D’Ippoliti, 2012. "A test of the rational expectations hypothesis using data from a natural experiment," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4661-4678, December.
    2. Klemens Keldenich & Marcus Klemm, 2014. "Double or nothing?! Small groups making decisions under risk in “Quiz Taxi”," Theory and Decision, Springer, vol. 77(2), pages 243-274, August.
    3. Egil Matsen & Bjarne Strøm, 2006. "Joker: Choice in a simple game with large stakes," Working Paper Series 8307, Department of Economics, Norwegian University of Science and Technology.
    4. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    5. repec:zbw:rwirep:0278 is not listed on IDEAS
    6. Nicolas de Roos & Yianis Sarafidis, 2010. "Decision making under risk in Deal or No Deal," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(6), pages 987-1027.
    7. Klemens Keldenich & Marcus Klemm, 2011. "Double or Nothing!? Small Groups Making Decisions Under Risk in “Quiz Taxi”," Ruhr Economic Papers 0278, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Keldenich, Klemens & Klemm, Marcus, 2011. "Double or Nothing!? Small Groups Making Decisions Under Risk in ""Quiz Taxi""," Ruhr Economic Papers 278, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Bliss, Richard T. & Potter, Mark E. & Schwarz, Christopher, 2012. "Decision making and risk aversion in the Cash Cab," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 163-173.
    10. Robert Brooks & Robert Faff & Daniel Mulino & Richard Scheelings, 2009. "Deal or No Deal, That is the Question: The Impact of Increasing Stakes and Framing Effects on Decision‐Making under Risk," International Review of Finance, International Review of Finance Ltd., vol. 9(1‐2), pages 27-50, March.
    11. Philomena M. Bacon & Peter G. Moffatt, 2012. "Mortgage Choice as a Natural Field Experiment on Choice under Risk," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44(7), pages 1401-1426, October.
    12. Uyanga Turmunkh & Martijn J. van den Assem & Dennie van Dolder, 2019. "Malleable Lies: Communication and Cooperation in a High Stakes TV Game Show," Management Science, INFORMS, vol. 65(10), pages 4795-4812, October.
    13. Roger Hartley & Gauthier Lanot & Ian Walker, 2014. "Who Really Wants To Be A Millionaire? Estimates Of Risk Aversion From Gameshow Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(6), pages 861-879, September.
    14. Whitle, Richard & Rae, Jonathan & Pyke, Chris, 2015. "An empirical investigation into the propensity of reckless decision making within the high pressure environment of Deal or No Deal," MPRA Paper 66832, University Library of Munich, Germany.
    15. Giannikos, Christos I. & Kakolyris, Andreas & Suen, Tin Shan, 2023. "Prospect theory and a manager's decision to trade a blind principal bid basket," Global Finance Journal, Elsevier, vol. 55(C).
    16. Alma Cohen & Liran Einav, 2007. "Estimating Risk Preferences from Deductible Choice," American Economic Review, American Economic Association, vol. 97(3), pages 745-788, June.
    17. J. Francois Outreville, 2014. "Risk Aversion, Risk Behavior, and Demand for Insurance: A Survey," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 37(2), pages 158-186.
    18. Elgin, Ceyhun & Torul, Orhan & Aydoğdu, Ertunç, 2021. "Risky choices in a natural experiment from Turkey: Var Mısın Yok Musun?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).
    19. Jakusch, Sven Thorsten, 2017. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Leibniz Institute for Financial Research SAFE, revised 2017.
    20. Czibor, Eszter & Claussen, Jörg & van Praag, Mirjam, 2019. "Women in a men’s world: Risk taking in an online card game community," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 62-89.
    21. Sjögren Lindquist, Gabriella & Säve-Söderbergh, Jenny, 2006. "Testing the rationality assumption using a design difference in the TV game show 'Jeopardy'," Working Paper Series 9/2006, Stockholm University, Swedish Institute for Social Research.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reecon:v:63:y:2009:i:4:p:282-295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622941 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.