Arbeitspapier
Rationality on the rise: Why relative risk aversion increases with stake size
How does risk tolerance vary with stake size? This important question cannot be adequately answered if framing effects, nonlinear probability weighting, and heterogeneity of preference types are neglected. We show that, contrary to gains, no coherent change in relative risk aversion is observed for losses. The increase in relative risk aversion over gains cannot be captured by the curvature of the utility function. It is driven predominantly by a change in probability weighting of a majority group of individuals who exhibit more rational probability weighting at high stakes. These results not only challenge expected utility theory, but also prospect theory.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 0708
- Klassifikation
-
Wirtschaft
- Thema
-
Entscheidung bei Risiko
Risikoaversion
Erwartungsnutzen
Prospect Theory
Test
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fehr-Duda, Helga
Bruhin, Adrian
Epper, Thomas F.
Schubert, Renate
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Zurich, Socioeconomic Institute
- (wo)
-
Zurich
- (wann)
-
2008
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Fehr-Duda, Helga
- Bruhin, Adrian
- Epper, Thomas F.
- Schubert, Renate
- University of Zurich, Socioeconomic Institute
Entstanden
- 2008
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