Eliciting Risk Preferences: Firefighting in the Field

23 Pages Posted: 7 Mar 2016

See all articles by Utteeyo Dasgupta

Utteeyo Dasgupta

Utteeyo Dasgupta; IZA; Global Labor Organization (GLO)

Subha Mani

Fordham University - Fordham College at Rose Hill; Population Studies Center; Global Labor Organization (GLO)

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. Available at SSRN: https://ssrn.com/abstract=2742553 or http://dx.doi.org/10.2139/ssrn.2742553

Utteeyo Dasgupta (Contact Author)

Utteeyo Dasgupta ( email )

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HOME PAGE: http://https://sites.google.com/view/utteeyodasgupta/home

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Global Labor Organization (GLO) ( email )

Collogne
Germany

Subha Mani

Fordham University - Fordham College at Rose Hill ( email )

United States

Population Studies Center ( email )

3718 Locust Walk
School of Arts and Sciences
Philadelphia, PA Pennsylvania 19104-6298
United States

Global Labor Organization (GLO) ( email )

Collogne
Germany

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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