Small-scale changes in wealth and attitudes towards risk

Arbeitspapier

This paper reports on an experiment designed to examine the effects of small-scale changes in wealth on risk attitudes. We find that the money given prior to risky choices does not induce a change of subjects' risk preferences. This result supports a key assumption in a recent literature over calibration critique of decision theories. Furthermore, as the money given to subjects in our experiment is administered in between risky tasks and framed as a reward rather than a windfall gain, our result suggests that experimental findings reporting that a prior monetary gain induces individuals to take more risks (housemoney effect) may be more sensitive to prior experience with the riskriskelicitation task or framing of the money than previously thought.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2010-11

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Microeconomic Behavior: Underlying Principles ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: risk aversion ; wealth effects ; risk-elicitation ; house-money effect ; narrow framing ; Einkommen ; Risikopräferenz ; Risikoaversion ; Entscheidungstheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sousa, Sergio
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/49688
• Last update: 10.03.2025, 11:42 AM CET