Income and choice under risk
This paper studies the relationship between income and risky choice in a field ex- periment where stakes are of first-orderimportance to the subjects' living standards. We combine observations of stopping decisions in a Norwegian game show with reliable data on each subject's income. Participants in the experiment are randomly drawn from a large subject pool that is representative of the Norwegian population. Our re- sults clearly indicate that people are risk-averse in making large-stake choices and that decision makers with high income are more willing to accept nancial risk.
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