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Selection and Mode Effects in Risk Preference Elicitation Experiments

Author

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  • von Gaudecker, H.M.
  • van Soest, A.H.O.

    (Tilburg University, Center For Economic Research)

  • Wengstrom, E.

Abstract

We combine data from a risk preference elicitation experiment conducted on a representative sample via the Internet with laboratory data on students for the same experiment to investigate effects of implementation mode and of subject pool selection. We find that the frequency of errors in the lab experiment ist drastically below that of the representative sample in the Internet experiment, and average risk aversion is also lower. Considering the student-like subsample of the Internet subjects and comparing a tradtitional lab design with an Internet-like design in the lab gives two ways to decompose these differences into differences due to subject pool selection and differences due to implementation mode. Both lead to the conclusion that the differences are due to selection and not implementation mode. An analysis of the various steps leading to participation or non-participation in the Internet survey shows that these processes are selective in selecting subjects who make fewer errors, but do not lead to biased conclusions on risk preferences. These findings point a the usefulness of the Internet survey as an alternative to a student pool in the laboratory if the ambition is to use the experiments to draw inference on a broad population.
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Suggested Citation

  • von Gaudecker, H.M. & van Soest, A.H.O. & Wengstrom, E., 2008. "Selection and Mode Effects in Risk Preference Elicitation Experiments," Discussion Paper 2008-11, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:35714555-f654-4522-bcb1-b35ec93c5f4a
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    Cited by:

    1. Tamás Csermely & Alexander Rabas, 2016. "How to reveal people’s preferences: Comparing time consistency and predictive power of multiple price list risk elicitation methods," Journal of Risk and Uncertainty, Springer, vol. 53(2), pages 107-136, December.
    2. Andersson, Ola & Tyran, Jean-Robert & Wengström, Erik & Holm, Håkan J., 2013. "Risk Aversion Relates to Cognitive Ability: Fact or Fiction?," Working Paper Series 964, Research Institute of Industrial Economics.
    3. Adam Booij & Bernard Praag & Gijs Kuilen, 2010. "A parametric analysis of prospect theory’s functionals for the general population," Theory and Decision, Springer, vol. 68(1), pages 115-148, February.
    4. Ola Andersson & Håkan J. Holm & Jean-Robert Tyran & Erik Wengström, 2020. "Robust inference in risk elicitation tasks," Journal of Risk and Uncertainty, Springer, vol. 61(3), pages 195-209, December.
    5. Golsteyn, B.H.H. & Grönqvist, H. & Lindahl, L., 2013. "Time preferences and lifetime outcomes," ROA Research Memorandum 019, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. Booth, Alison & Cardona-Sosa, Lina & Nolen, Patrick, 2014. "Gender differences in risk aversion: Do single-sex environments affect their development?," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 126-154.
    7. Patrick Bell & Rozlyn Engel & Darren Hudson & Julian Jamison & William Skimmyhorn, 2018. "Risk preferences in future military leaders," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(2), pages 11-24, September.
    8. Steffen Huck & Wieland Müller, 2012. "Allais for all: Revisiting the paradox in a large representative sample," Journal of Risk and Uncertainty, Springer, vol. 44(3), pages 261-293, June.
    9. Hans-Martin von Gaudecker & Arthur van Soest & Erik Wengstrom, 2011. "Heterogeneity in Risky Choice Behavior in a Broad Population," American Economic Review, American Economic Association, vol. 101(2), pages 664-694, April.
    10. Lisa Anderson & Jennifer Mellor, 2009. "Are risk preferences stable? Comparing an experimental measure with a validated survey-based measure," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 137-160, October.
    11. Jon Anderson & Stephen Burks & Jeffrey Carpenter & Lorenz Götte & Karsten Maurer & Daniele Nosenzo & Ruth Potter & Kim Rocha & Aldo Rustichini, 2013. "Self-selection and variations in the laboratory measurement of other-regarding preferences across subject pools: evidence from one college student and two adult samples," Experimental Economics, Springer;Economic Science Association, vol. 16(2), pages 170-189, June.
    12. Andersson, Ola & Holm, Håkan J. & Tyran, Jean-Robert & Wengström, Erik, 2013. "Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism," Working Paper Series 989, Research Institute of Industrial Economics.
    13. Hans-Martin Gaudecker & Arthur Soest & Erik Wengström, 2012. "Experts in experiments," Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 159-190, October.
    14. Booij, Adam S. & van de Kuilen, Gijs, 2009. "A parameter-free analysis of the utility of money for the general population under prospect theory," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 651-666, August.
    15. Stefan Zeisberger & Dennis Vrecko & Thomas Langer, 2012. "Measuring the time stability of Prospect Theory preferences," Theory and Decision, Springer, vol. 72(3), pages 359-386, March.
    16. Hans-Martin von Gaudecker & Arthur van Soest & Erik Wengstrom, 2011. "Heterogeneity in Risky Choice Behavior in a Broad Population," American Economic Review, American Economic Association, vol. 101(2), pages 664-694, April.
    17. Ola Andersson & Håkan J. Holm & Jean-Robert Tyran & Erik Wengström, 2016. "Risk Aversion Relates To Cognitive Ability: Preferences Or Noise?," Journal of the European Economic Association, European Economic Association, vol. 14(5), pages 1129-1154, October.
    18. Ola Andersson & Håkan J. Holm & Jean-Robert Tyran & Erik Wengström, 2016. "Deciding for Others Reduces Loss Aversion," Management Science, INFORMS, vol. 62(1), pages 29-36, January.
    19. Csermely, Tamás & Rabas, Alexander, 2014. "How to reveal people's preferences: Comparing time consistency and predictive power of multiple price list risk elicitation methods," Department of Economics Working Paper Series 185, WU Vienna University of Economics and Business.
    20. Chew, Soo Hong & Ebstein, Richard P. & Zhong, Songfa, 2013. "Sex-hormone genes and gender difference in ultimatum game: Experimental evidence from China and Israel," Journal of Economic Behavior & Organization, Elsevier, vol. 90(C), pages 28-42.
    21. Tamás Csermely & Alexander Rabas, 2014. "How to reveal people's preferences: Comparing time consistency and predictive power of multiple price list risk elicitation methods," Department of Economics Working Papers wuwp185, Vienna University of Economics and Business, Department of Economics.
    22. Lionel Page & Daniel G. Goldstein, 2016. "Subjective beliefs about the income distribution and preferences for redistribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(1), pages 25-61, June.
    23. Tyran, Jean-Robert & Andersson, Ola & Holm, Håkan J. & Wengström, Erik, 2013. "Risking Other People?s Money," CEPR Discussion Papers 9743, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Risk aversion; Internet surveys; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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