A theoretical and experimental appraisal of four risk elicitation methods

• Published in: Experimental economics : a journal of the Economic Science Association Vol. 19; no. 3; pp. 613 - 641
• Main Authors: Crosetto, Paolo, Filippin, Antonio
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.09.2016; Springer Nature B.V
• Subjects: Attitudes; Behavior; Behavioral/Experimental Economics; Bias; Cognitive load; Economic models; Economic statistics; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Game Theory; Incentives; Life Sciences; Longitudinal studies; Lotteries; Mechanics; Microeconomics; Operations Research/Decision Theory; Original Paper; Preferences; Psychological aspects; Questionnaires; Risk; Simulation; Social and Behav. Sciences; Studies; Risk attitudes; C91; D81; C81; Experiment; Elicitation methods; risk attitude; experimental economics; elicitation method
• ISSN: 1386-4157; 1573-6938; 1573-6938
• DOI: 10.1007/s10683-015-9457-9

The paper performs an in-depth comparison of four incentivised risk elicitation tasks. We show by means of a simulation exercise that part of the often observed heterogeneity of estimates across tasks is due to task-specific measurement error induced by the mere mechanics of the tasks. We run a replication experiment in a homogeneous subject pool using a between subjects one-shot design. Results shows that the task estimates vary over and above what can be explained by the simulations. We investigate the possibility the tasks elicit different types of preferences, rather than simply provide a different measure of the same preferences. In particular, the availability of a riskless alternative plays a prominent role helping to explain part of the differences in the estimated preferences.