EXPLORING THE CONSISTENCY OF HIGHER ORDER RISK PREFERENCES

• 成果类型: Article
• 署名作者: Haering, Alexander; Heinrich, Timo; Mayrhofer, Thomas
• 署名单位: Leibniz Association; RWI - Leibniz Institut fur Wirtschaftsforschung; Durham University; Harvard University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12424
• 发表日期: 2020
• 页码: 283-320
• 关键词: self-insurance; cultural-differences; aversion; prudence; attitudes; utility; uncertainty; incentives; CHINA; probability

摘要

This study measures higher order risk preferences and their consistency. We explore the role of country differences, the variation of stakes, and the framing of lotteries. We observe a robust dichotomous pattern of choice behavior in China, the United States, and Germany. The majority of choices are consistent with mixed risk aversion or mixed risk-loving behavior. We also find this pattern after a 10-fold increase in the stakes. Finally, our results reveal that this pattern is strengthened if the lotteries are displayed in compound instead of reduced form. In a follow-up study, we explore potential explanations for this framing effect.