Eliciting Risk Preferences: Firefighting in the Field

23 Pages Posted: 7 Mar 2016

See all articles by Utteeyo Dasgupta

Utteeyo Dasgupta

Wagner College-Department of Economics

Subha Mani

Fordham University - Fordham College at Rose Hill

Smriti Sharma

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Abstract

Field constraints often necessitate choosing an elicitation task that is intuitive, easy to explain, and simple to implement. Given that subject behavior often differs dramatically across tasks when eliciting risk preferences, caution needs to be exercised in choosing one risk elicitation task over another in the face of field constraints. We compare behavior in the simple most investment game (Gneezy and Potters 1997) and the ordered lottery choice game (Eckel and Grossman 2002) to evaluate whether the simpler task allows us to elicit attitudes consistent with those elicited from the ordered lottery task. Using a sample of over 2000 Indian undergraduate students, we find risk attitudes to be fairly stable across the two tasks. Our results further indicate that the consistency of risk attitudes across the tasks depends on gender of the subject, quantitative skills, father's education level, and dispositional factors such as locus of control and Big Five personality traits.

Keywords: risk preferences, experiment design, elicitation methods, personality traits, India

JEL Classification: C91, C81, D81

Suggested Citation

Dasgupta, Utteeyo and Mani, Subha and Sharma, Smriti and Singhal, Saurabh, Eliciting Risk Preferences: Firefighting in the Field. IZA Discussion Paper No. 9765, Available at SSRN: https://ssrn.com/abstract=2742553

Utteeyo Dasgupta (Contact Author)

Wagner College-Department of Economics ( email )

Staten Island, NY 10301
United States

HOME PAGE: http://https://sites.google.com/site/utteeyodasgupta/

Subha Mani

Fordham University - Fordham College at Rose Hill ( email )

United States

Smriti Sharma

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

HOME PAGE: http://www.wider.unu.edu/aboutus/people/resident-researchers/en_GB/Saurabh-Singhal/

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