Risk aversion relates to cognitive ability: Preferences or Noise?
(2016) In Journal of the European Economic Association 14(5). p.1129-1154- Abstract
- Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation may be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making rather than to risk preferences. (JEL: C81, C91, D12, D81)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/8046677
- author
- Andersson, Ola LU ; Holm, Jerker LU ; Tyran, Jean-Robert and Wengström, Erik LU
- organization
- publishing date
- 2016
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Journal of the European Economic Association
- volume
- 14
- issue
- 5
- pages
- 26 pages
- publisher
- Wiley-Blackwell
- external identifiers
-
- scopus:84980390267
- wos:000389064000005
- ISSN
- 1542-4774
- DOI
- 10.1111/jeea.12179
- language
- English
- LU publication?
- yes
- id
- be0bd362-55af-4cda-b89a-1c98af2a4bc8 (old id 8046677)
- date added to LUP
- 2016-04-01 13:52:22
- date last changed
- 2022-04-21 23:54:12
@article{be0bd362-55af-4cda-b89a-1c98af2a4bc8, abstract = {{Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation may be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making rather than to risk preferences. (JEL: C81, C91, D12, D81)}}, author = {{Andersson, Ola and Holm, Jerker and Tyran, Jean-Robert and Wengström, Erik}}, issn = {{1542-4774}}, language = {{eng}}, number = {{5}}, pages = {{1129--1154}}, publisher = {{Wiley-Blackwell}}, series = {{Journal of the European Economic Association}}, title = {{Risk aversion relates to cognitive ability: Preferences or Noise?}}, url = {{http://dx.doi.org/10.1111/jeea.12179}}, doi = {{10.1111/jeea.12179}}, volume = {{14}}, year = {{2016}}, }