Sleepiness, Choice Consistency, and Risk Preferences

33 Pages Posted: 30 Dec 2014

See all articles by Marco Castillo

Marco Castillo

Texas A&M University

David L. Dickinson

Appalachian State University

Ragan Petrie

Texas A&M University - Department of Economics; University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Abstract

We investigate the consistency and stability of individual risk preferences by manipulating cognitive resources. Participants are randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time (circadian mismatched) and choose allocations between two risky assets (using the Choi et al., 2007, design). Consistency of behavior of circadian matched and mismatched subjects is statistically the same, however mismatched subjects tend to take more risks. We conclude that, consistent with several theories, preferences are rational yet can change depending on state-level cognitive resources.

Keywords: sleep, risky preference, choice consistency

JEL Classification: C91, D81

Suggested Citation

Castillo, Marco and Dickinson, David L. and Petrie, Ragan, Sleepiness, Choice Consistency, and Risk Preferences. IZA Discussion Paper No. 8709. Available at SSRN: https://ssrn.com/abstract=2543903

Marco Castillo (Contact Author)

Texas A&M University ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

HOME PAGE: http://www.marcocastillo.org

David L. Dickinson

Appalachian State University ( email )

Boone, NC 28608
United States
1-828-262-2117 (Phone)
1-828-262-6105 (Fax)

Ragan Petrie

Texas A&M University - Department of Economics ( email )

4228 TAMU
College Station, TX 77843-4228
United States

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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