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Inducing risk preferences in economics experiments


  • Ian M. Dobbs
  • Anthony D. Miller


A common procedure in experiments is to use binary lotteries to induce in all subjects pre-specified risk preferences. The validity of this procedure has been established only for a subject performing a single task, yet the procedure is normally applied in multi-task settings. This article formally analyses the multi-task case and establishes necessary and sufficient conditions relating to experimental design. New guidance is provided for the design of experiments involving interdependent tasks.

Suggested Citation

  • Ian M. Dobbs & Anthony D. Miller, 2012. "Inducing risk preferences in economics experiments," Applied Economics Letters, Taylor & Francis Journals, vol. 19(7), pages 657-660, May.
  • Handle: RePEc:taf:apeclt:v:19:y:2012:i:7:p:657-660 DOI: 10.1080/13504851.2011.593493

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    1. Paldam, Martin, 2000. " Social Capital: One or Many? Definition and Measurement," Journal of Economic Surveys, Wiley Blackwell, vol. 14(5), pages 629-653, December.
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    3. Papagapitos, Agapitos & Riley, Robert, 2009. "Social trust and human capital formation," Economics Letters, Elsevier, vol. 102(3), pages 158-160, March.
    4. Anderson, Joan B., 2008. "Social capital and student learning: Empirical results from Latin American primary schools," Economics of Education Review, Elsevier, vol. 27(4), pages 439-449, August.
    5. Eiji Yamamura, 2008. "Determinants of trust in a racially homogeneous society," Economics Bulletin, AccessEcon, vol. 26(1), pages 1-9.
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