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Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)

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  • Jonathan Chapman
  • Erik Snowberg
  • Stephanie Wang
  • Colin Camerer

Abstract

We introduce DOSE - Dynamically Optimized Sequential Experimentation - and use it to estimate individual-level loss aversion in a representative sample of the U.S. population (N = 2,000). DOSE elicitations are more accurate, more stable across time, and faster to administer than standard methods. We find that around 50% of the U.S. population is loss tolerant. This is counter to earlier findings, which mostly come from lab/student samples, that a strong majority of participants are loss averse. Loss attitudes are correlated with cognitive ability: loss aversion is more prevalent in people with high cognitive ability, and loss tolerance is more common in those with low cognitive ability. We also use DOSE to document facts about risk and time preferences, indicating a high potential for DOSE in future research.

Suggested Citation

  • Jonathan Chapman & Erik Snowberg & Stephanie Wang & Colin Camerer, 2018. "Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)," CESifo Working Paper Series 7262, CESifo Group Munich.
    • Handle: RePEc:ces:ceswps:_7262
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    1. repec:jdm:journl:v:14:y:2019:i:4:p:381-394 is not listed on IDEAS
    2. repec:eee:ecolet:v:178:y:2019:i:c:p:116-120 is not listed on IDEAS
    3. Potrafke, Niklas, 2019. "Risk aversion, patience and intelligence: Evidence based on macro data," Economics Letters, Elsevier, vol. 178(C), pages 116-120.
    4. Amador, Luis & Brañas-Garza, Pablo & Espín, Antonio M. & Garcia, Teresa & Hernández, Ana, 2019. "Consistent and inconsistent choices under uncertainty: The role of cognitive abilities," MPRA Paper 95178, University Library of Munich, Germany.
    5. repec:jdm:journl:v:14:y:2019:i:3:p:234-279 is not listed on IDEAS
    6. Potrafke, Niklas, 2019. "Risk aversion, patience and intelligence: Evidence based on macro data," Economics Letters, Elsevier, vol. 178(C), pages 116-120.

    More about this item

    Keywords

    dynamic experiments; DOSE; loss aversion; risk preferences; time preferences;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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