Manipulating Reliance on Intuition Reduces Risk and Ambiguity Aversion
Prior research suggests that those who rely on intuition rather than effortful reasoning when making decisions are less averse to risk and ambiguity. The evidence is largely correlational, however, leaving open the question of the direction of causality. In this paper, we present experimental evidence of causation running from reliance on intuition to risk and ambiguity preferences. We directly manipulate participants’ predilection to rely on intuition and find that enhancing reliance on intuition lowers the probability of being ambiguity averse by 30 percentage points and increases risk tolerance by about 30 percent in the experimental subpopulation where we would a priori expect the manipulation to be successful (males).
|Date of creation:||2013|
|Date of revision:||Jan 2013|
|Contact details of provider:|| Postal: Via Sallustiana, 62 - 00187 Roma|
Phone: +39 066790013
Fax: +39 0647924872
Web page: http://www.eief.it/repec
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Butler, Jeff & Guiso, Luigi & Jappelli, Tullio, 2011.
"The role of intuition and reasoning in driving aversion to risk and ambiguity,"
CEPR Discussion Papers
8334, C.E.P.R. Discussion Papers.
- Jeffrey Butler & Luigi Guiso & Tullio Jappelli, 2014. "The role of intuition and reasoning in driving aversion to risk and ambiguity," Theory and Decision, Springer, vol. 77(4), pages 455-484, December.
- Jeffrey V. Butler & Luigi Guiso & Tullio Jappelli, 2011. "The role of intuition and reasoning in driving aversion to risk and ambiguity," Economics Working Papers ECO2011/13, European University Institute.
- Jeffrey V. Butler & Luigi Guiso & Tullio Jappelli, 2011. "The Role of Intuition and Reasoning in Driving Aversion to Risk and Ambiguity," CSEF Working Papers 282, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 15 Jan 2013.
- Jeffrey V. Butler & Luigi Guiso & Tullio Jappelli, 2011. "The role of intuition and reasoning in driving aversion to risk and ambiguity," EIEF Working Papers Series 1107, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2011.
- Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
- Leonard Lee & On Amir & Dan Ariely, 2009. "In Search of Homo Economicus: Cognitive Noise and the Role of Emotion in Preference Consistency," Journal of Consumer Research, Oxford University Press, vol. 36(2), pages 173 - 187.
- Charles R. Plott & Kathryn Zeiler, 2005. "The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations," American Economic Review, American Economic Association, vol. 95(3), pages 530-545, June.
- Michel Tuan Pham & Leonard Lee & Andrew T. Stephen, 2012. "Feeling the Future: The Emotional Oracle Effect," Journal of Consumer Research, Oxford University Press, vol. 39(3), pages 461 - 477.
When requesting a correction, please mention this item's handle: RePEc:eie:wpaper:1301. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Facundo Piguillem)
If references are entirely missing, you can add them using this form.