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Risk preference elicitation in finance: Survey vs. experiment

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Listed:
  • Chen, Fadong
  • Han, Jiatong
  • Bao, Leo

Abstract

Understanding investors’ risk preferences is crucial for financial companies to manage risk and comply with regulatory suitability requirements. While measuring risk preferences through surveys is the standard practice in the field, incentivized experimental methods are widely used in economic labs. Using data from 108 retail investors (62 % female) on a wealth-management FinTech platform, we elicit risk preferences using both a standard survey instrument and an incentivized Holt–Laury task, and relate the resulting survey- and experimental-based measures to actual portfolio choices immediately after onboarding and six months later. We find that the risk preferences elicited via the experiment outperform those via the survey in predicting investors’ portfolios over short and medium periods. These results suggest that the experimental method complements the traditional survey approach and enhances the quality of preference elicitation. Our findings have important implications for selecting preference elicitation methods in the financial industry.

Suggested Citation

  • Chen, Fadong & Han, Jiatong & Bao, Leo, 2026. "Risk preference elicitation in finance: Survey vs. experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 122(C).
    • Handle: RePEc:eee:soceco:v:122:y:2026:i:c:s221480432600056x
    DOI: 10.1016/j.socec.2026.102565
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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G40 - Financial Economics - - Behavioral Finance - - - General

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