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Visual formats in risk preference elicitation: What catches the eye?

Author

Listed:
  • Michelle S. Segovia

    (University of Delaware)

  • Marco A. Palma

    (Texas A&M University)

  • Jayson L. Lusk

    (Oklahoma State University)

  • Andreas C. Drichoutis

    (School of Applied Economics and Social Sciences, Agricultural University of Athens)

Abstract

We explore the effect of lottery presentation formats on elicitation of risk preferences using a popular probability varying task (Holt & Laury. The American Economic Review 92 (5), 1644–1655. 2002) and a payoff-varying task (Drichoutis & Lusk. Journal of Risk and Uncertainty 53 (2), 89–106. 2016). The presentation formats use horizontal bars that vary either the width or height of the bars (or both at the same time) to help subjects in judging how large or small probabilities and monetary amounts are in a given choice set. These graphical formats are compared to a text only format. We complement our choice data with eye tracking data that enriches our structural models with additional information regarding how visual attention varies with the presented information. While we find no statistically significant effects of presentation formats on elicited parameters for risk preferences, we find that eye tracking information not only is associated with preference parameters, but it also changes the inferences with respect to which decision theory better fits the choice data.

Suggested Citation

  • Michelle S. Segovia & Marco A. Palma & Jayson L. Lusk & Andreas C. Drichoutis, 2025. "Visual formats in risk preference elicitation: What catches the eye?," Journal of Risk and Uncertainty, Springer, vol. 70(3), pages 275-303, June.
    • Handle: RePEc:kap:jrisku:v:70:y:2025:i:3:d:10.1007_s11166-025-09455-9
    DOI: 10.1007/s11166-025-09455-9
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    Keywords

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    JEL classification:

    • 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
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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