Risk Attitudes in Large Stake Gambles: Evidence from a Game Show
23 Pages Posted: 7 Jul 2006
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: Suggested Citation
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