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Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison

Lonnqvist, Jan-Erik; Verkasalo, Markku; Walkowitz, Gari and Wichardt, Philipp LU (2015) In Journal of Economic Behavior and Organization 119. p.254-266
Abstract
This paper reports on an empirical comparison of two prominent measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen et al. (2011) - with respect to their within-subject stability over time (one year) and their correlation with actual risk-taking behavior in the lab - here the amount sent in a trust game (Berg et al., 1995). Our results suggest that the two risk attitude measures are at best only weakly correlated. Only the questionnaire measure shows high test-retest stability, while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality... (More)
This paper reports on an empirical comparison of two prominent measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen et al. (2011) - with respect to their within-subject stability over time (one year) and their correlation with actual risk-taking behavior in the lab - here the amount sent in a trust game (Berg et al., 1995). Our results suggest that the two risk attitude measures are at best only weakly correlated. Only the questionnaire measure shows high test-retest stability, while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality measure and is correlated with actual risk-taking behavior. With respect to behavior in the trust game, we find a high retest stability of transfers. This supports the conjecture that trusting behavior has a component which itself is a stable individual characteristic. (C) 2015 Elsevier B.V. All rights reserved. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Risk attitudes, Trust, Personality, Lab experiments
in
Journal of Economic Behavior and Organization
volume
119
pages
254 - 266
publisher
Elsevier
external identifiers
  • wos:000366958800017
  • scopus:84941281852
ISSN
0167-2681
DOI
10.1016/j.jebo.2015.08.003
language
English
LU publication?
yes
id
5a129207-facf-4df3-ae8a-f17043945840 (old id 8548673)
date added to LUP
2016-01-29 11:07:12
date last changed
2017-10-22 04:23:39
@article{5a129207-facf-4df3-ae8a-f17043945840,
  abstract     = {This paper reports on an empirical comparison of two prominent measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen et al. (2011) - with respect to their within-subject stability over time (one year) and their correlation with actual risk-taking behavior in the lab - here the amount sent in a trust game (Berg et al., 1995). Our results suggest that the two risk attitude measures are at best only weakly correlated. Only the questionnaire measure shows high test-retest stability, while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality measure and is correlated with actual risk-taking behavior. With respect to behavior in the trust game, we find a high retest stability of transfers. This supports the conjecture that trusting behavior has a component which itself is a stable individual characteristic. (C) 2015 Elsevier B.V. All rights reserved.},
  author       = {Lonnqvist, Jan-Erik and Verkasalo, Markku and Walkowitz, Gari and Wichardt, Philipp},
  issn         = {0167-2681},
  keyword      = {Risk attitudes,Trust,Personality,Lab experiments},
  language     = {eng},
  pages        = {254--266},
  publisher    = {Elsevier},
  series       = {Journal of Economic Behavior and Organization},
  title        = {Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison},
  url          = {http://dx.doi.org/10.1016/j.jebo.2015.08.003},
  volume       = {119},
  year         = {2015},
}