Eliciting Risk Preferences Using Choice Lists
We experimentally 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 failure of incentive compatibility can be rationalized by the interaction between non-expected utility and the random incentive system, as suggested by Karni and Safra (1987).
|Date of creation:||08 Jun 2015|
|Date of revision:||22 Nov 2016|
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