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 sub-population where we would a priori expect the manipulation to be successful (males)
|Date of creation:||24 Jan 2013|
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- 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 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," CSEF Working Papers 282, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 15 Jan 2013.
- 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 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.
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