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Explaining Heterogeneity in Risk Preferences Using a Finite Mixture Model

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  • Hajimoladarvish, Narges

    (Alzahra University)

Abstract

This paper studies the effect of the space (distance) between lotteries' outcomes on risk-taking behavior and the shape of estimated utility and probability weighting functions. Previously investigated experimental data shows a significant space effect in the gain domain. As compared to low spaced lotteries, high spaced lotteries are associated with higher

Suggested Citation

  • Hajimoladarvish, Narges, 2021. "Explaining Heterogeneity in Risk Preferences Using a Finite Mixture Model," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 16(4), pages 533-554, December.
    • Handle: RePEc:mbr:jmonec:v:16:y:2021:i:4:p:533-554
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    References listed on IDEAS

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