Lottery- and survey-based risk attitudes linked through a multichoice elicitation task

• Published in: IDEAS Working Paper Series from RePEc Vol. 84; no. 3; pp. 341 - 372
• Main Authors: Attanasi, Giuseppe, Georgantzís, Nikolaos, Rotondi, Valentina, Vigani, Daria
• Format: Journal Article Paper
• Language: English
• Published: New York Springer US 01.05.2018; Springer Nature B.V; Federal Reserve Bank of St. Louis
• Subjects: Attitudes; Behavioral/Experimental Economics; Correlation analysis; Decision making; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Elicitation; Expected utility; Finance; Game Theory; Incentives; Insurance; Management; Methods; Operations Research/Decision Theory; Polls & surveys; Risk; Risk assessment; Risk aversion; Risk factors; Self evaluation; Social and Behav. Sciences; Statistics for Business; Risk aversion; C91; Lottery choices; D81; Elicitation methods
• ISSN: 0040-5833; 1573-7187
• DOI: 10.1007/s11238-017-9613-0

We analyze the results from three different risk attitude elicitation methods. First, the broadly used test by Holt and Laury ( 2002 ), HL, second, the lottery-panel task by Sabater-Grande and Georgantzis ( 2002 ), SG, and third, responses to a survey question on self-assessment of general attitude towards risk (Dohmen et al. 2011 ). The first and the second task are implemented with real monetary incentives, while the third concerns all domains in life in general. Like in previous studies, the correlation of decisions across tasks is low and usually statistically non-significant. However, when we consider only subjects whose behavior across the panels of the SG task is compatible with constant relative risk aversion (CRRA), the correlation between HL and self-assessed risk attitude becomes significant. Furthermore, the correlation between HL and SG also increases for CRRA-compatible subjects, although it remains statistically non-significant.