Attitudes towards risk: An experiment

Jürgen Eichberger, Werner Güth, Wieland Müller

Research output: Contribution to journalArticleScientificpeer-review

8 Citations (Scopus)

Abstract

The evaluations of a repeated lottery with and without the option to sell the second–stage lottery are compared theoretically and experimentally. Comparing individuals’ risk attitudes, we find that risk attitudes differ depending on the measure of risk attitude applied. We also find that subjects show low or no risk aversion, but put very high value on the opportunity to sell the lottery in the second stage of the decision problem. These findings cast doubts on the suitability of the random price mechanism for truthful revelation of willingness to pay in sequential decision problems.

Original languageEnglish
Pages (from-to)89-124
Number of pages36
JournalMetroeconomica
Volume54
Issue number1
DOIs
Publication statusPublished - Feb 2003

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