Risk Attitudes in Large Stake Gambles: Evidence from a Game Show

23 Pages Posted: 7 Jul 2006

See all articles by Cary A. Deck

Cary A. Deck

University of Alabama - Department of Economics, Finance and Legal Studies

Jungmin Lee

IZA Institute of Labor Economics; FIU

Javier A. Reyes

University of Arkansas - Sam M. Walton College of Business

Date Written: May 17, 2006

Abstract

This paper estimates the degree of risk aversion of contestants appearing on Vas o No Vas, the Mexican version of Deal or No Deal. We consider both dynamic agents who fully backward induct and myopic agents that only look forward one period. Further, we vary the level of forecasting sophistication by the agents. We find substantial evidence of risk aversion, the degree of which is more modest than what is typically reported in the literature.

Keywords: Risk attitude, Uncertainty, Expected utility theory, Game show

JEL Classification: D8, C9

Suggested Citation

Deck, Cary A. and Lee, Jungmin and Lee, Jungmin and Reyes, Javier A., Risk Attitudes in Large Stake Gambles: Evidence from a Game Show (May 17, 2006). Available at SSRN: https://ssrn.com/abstract=912504 or http://dx.doi.org/10.2139/ssrn.912504

Cary A. Deck

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States

Jungmin Lee (Contact Author)

FIU ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

IZA Institute of Labor Economics

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

Javier A. Reyes

University of Arkansas - Sam M. Walton College of Business ( email )

2 East Center Street
University of Arkansas
Fayetteville, AR 72701
United States
479-575-6079 (Phone)

HOME PAGE: http://economics.uark.edu/directory.php?id=reyes

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