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Eliciting Risk Preferences Using Choice Lists


  • Freeman, David
  • Halevy, Yoram
  • Kneeland, Terri


We study the effect of embedding pairwise choices between lotteries within a choice list on measured risk attitude. Using an experiment with online workers, we find that subjects choose the risky lottery rather than a sure payment significantly more often when responding to a choice list. This behavior can be rationalized by the interaction between non-expected utility and the random incentive system, as suggested by Karni and Safra (1987).

Suggested Citation

  • Freeman, David & Halevy, Yoram & Kneeland, Terri, 2015. "Eliciting Risk Preferences Using Choice Lists," working papers yoram_halevy-2015-9, Vancouver School of Economics, revised 09 Jan 2018.
  • Handle: RePEc:ubc:pmicro:yoram_halevy-2015-9

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    References listed on IDEAS

    1. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
    2. Yoram Halevy, 2008. "Strotz Meets Allais: Diminishing Impatience and the Certainty Effect," American Economic Review, American Economic Association, vol. 98(3), pages 1145-1162, June.
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    Cited by:

    1. Jonathan Chapman & Mark Dean & Pietro Ortoleva & Erik Snowberg & Colin Camerer, 2017. "Willingness to Pay and Willingness to Accept are Probably Less Correlated Than You Think," NBER Working Papers 23954, National Bureau of Economic Research, Inc.
    2. Freeman, David & Manzini, Paola & Mariotti, Marco & Mittone, Luigi, 2016. "Procedures for eliciting time preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 235-242.

    More about this item


    random incentive system; isolation; independence axiom; multiple price list; reduction of compound lotteries; preference reversals; certainty effect;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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