Risk Attitude And Inconsistencies - Does The Choice Of Display Format And Risk Elicitation Method Influence The Outcomes?

In the past decade, many studies have measured individual risk attitude with different elicitation methods using within-subject design and have found significant disparities across the elicitation methods. According to the existing literature, there are also differences in the observed understanding of the elicitation methods measured by the inconsistency rate. However, there are no studies yet that compares the inconsistency rate across different elicitation methods in a within-subject design. Therefore, we compare both the inconsistency rate and the risk attitude of participants in two different lottery tasks in a within-subject design, namely the lottery task by Holt and Laury (2002) as well as the one by Brick, Visser and Burns (2012). Moreover, we analyze in a between-subject design whether a visualization of a lottery task for a better understanding results in differences in the elicited risk attitude and thus leads to the desired reduction of the inconsistency rate. Results show that the elicited risk attitudes are more risk averse in the more complex Holt-and-Laury task in both display formats. Moreover, we find that the visualization results in more risk averse responses in both lottery tasks. According to the inconsistency rate, we find that the Brick-Visser-Burns task is better understood than the Holt-and-Laury task, especially in the textual display format. Furthermore, the visual display format of the Holt-and-Laury task results in a significantly better understanding compared to the textual display format. Submitted File(s) History of Uploads