To pay or not to pay: measuring risk preferences in lab and field

Article


Branas-Garza, P., Estepa, L., Jorrat, D., Orozco, V. and Rascon Ramirez, E. 2021. To pay or not to pay: measuring risk preferences in lab and field. Judgment and Decision Making. 16 (5), pp. 1290-1313. https://doi.org/10.1017/S1930297500008433
TypeArticle
TitleTo pay or not to pay: measuring risk preferences in lab and field
AuthorsBranas-Garza, P., Estepa, L., Jorrat, D., Orozco, V. and Rascon Ramirez, E.
Abstract

Measuring risk preferences using monetary incentives is costly. In the field, it might be also unfair and unsafe. The commonly used measure of Holt and Laury (2002) relies on a dozen lottery choices and payments, which make it time consuming and expensive. It also raises moral concerns as a result of the unequal payments generated by good and bad luck. Paying some but not all subjects may also create tensions between the researcher and subjects. In a pre-registered study in Honduras, Nigeria and Spain, we use a short version of Holt and Laury where we address all three concerns. We find in the field that not paying at all or paying with and without probabilistic rules makes no difference. Our hypothetical and short version makes our measurement of risk cheaper, fairer and safer.

Keywordsrisk preferences; Holt Laury; field experiments; monetary payoffs; incentives
LanguageEnglish
PublisherThe Society for Judgment and Decision Making, and The European Association for Decision Making
JournalJudgment and Decision Making
ISSN1930-2975
Publication dates
Print30 Sep 2021
Publication process dates
Deposited13 Sep 2021
Accepted27 Jun 2021
Output statusPublished
Publisher's version
Accepted author manuscript
File Access Level
Restricted
Copyright Statement

Copyright: © 2021. The authors license this article under the terms of the Creative Commons Attribution 3.0 License

Web address (URL)http://journal.sjdm.org/vol16.5.html
Digital Object Identifier (DOI)https://doi.org/10.1017/S1930297500008433
Web of Science identifierWOS:000701799300007
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