Measuring risk-taking and patience in financial decision-making

39 Pages Posted: 16 Dec 2014 Last revised: 12 Jul 2021

See all articles by Wolfgang Breuer

Wolfgang Breuer

RWTH Aachen University

Thomas Renerken

RWTH Aachen University - Department of Finance

Astrid Juliane Salzmann

Catholic University of Lille - IESEG School of Management; RWTH Aachen University - Department of Finance

Date Written: July 8, 2021

Abstract

We empirically compared the consistency among different kinds of measures for risk-taking and patience in a survey and an experiment. We evaluated how these variables relate to financial decisions, using a novel set of easy-to-apply survey questions as proxy. The main finding is that our results based on the novel survey questions describing financial behavior and on lifelike financial behavior in the laboratory are very similar. Therefore, relatively low-cost elicitation measures may be used to forecast decision-making, which, in turn, may be described by our novel set of survey questions.

Keywords: risk attitude; time preferences; decision-making; preferences

JEL Classification: C81, D12, D81, G11

Suggested Citation

Breuer, Wolfgang and Renerken, Thomas and Salzmann, Astrid Juliane, Measuring risk-taking and patience in financial decision-making (July 8, 2021). Review of Financial Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2538482 or http://dx.doi.org/10.2139/ssrn.2538482

Wolfgang Breuer

RWTH Aachen University ( email )

Templergraben 55
D-52056 Aachen, 52056
Germany

Thomas Renerken

RWTH Aachen University - Department of Finance ( email )

Templergraben 55
52056 Aachen, 52056
Germany

Astrid Juliane Salzmann (Contact Author)

Catholic University of Lille - IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, Paris 92800
France

RWTH Aachen University - Department of Finance ( email )

Templergraben 64
Aachen, 52056
Germany

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