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Risk attitudes in large stake gambles: evidence from a game show

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  • Cary Deck
  • Jungmin Lee
  • Javier Reyes

Abstract

This article estimates the degree of risk aversion of contestants appearing on 'Vas o No Vas', the Mexican version of 'Deal or No Deal'. We consider both dynamic agents, who fully backward induct and myopic agents that only look forward one period. Further, we vary the level of forecasting sophistication by the agents. We find substantial evidence of risk aversion, the degree of which is more modest than what is typically reported in the literature.

Suggested Citation

  • Cary Deck & Jungmin Lee & Javier Reyes, 2008. "Risk attitudes in large stake gambles: evidence from a game show," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 41-52.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:1:p:41-52
    DOI: 10.1080/00036840701235704
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    References listed on IDEAS

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    1. Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet E., 2014. "Dual criteria decisions," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 101-113.
      • Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet, 2009. "Dual Criteria Decisions," Working Papers 02-2009, Copenhagen Business School, Department of Economics.
    2. Pavlo Blavatskyy & Ganna Pogrebna, 2006. "Testing the Predictions of Decision Theories in a Natural Experiment When Half a Million Is at Stake," IEW - Working Papers 291, Institute for Empirical Research in Economics - University of Zurich.
    3. 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.
    4. 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.
    5. Thierry Post & Guido Baltussen & Martijn van den Assem, 2006. "Deal or No Deal? Decision-making under Risk in a Large-payoff Game Show," Tinbergen Institute Discussion Papers 06-009/2, Tinbergen Institute, revised 02 Feb 2006.
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