Title: Eliciting individual risk attitudes - different procedures, different findings

Authors: Sven Grüner; Norbert Hirschauer; Felix Krüger

Addresses: Institute of Agricultural and Nutritional Sciences, Martin Luther University Halle-Wittenberg, Germany ' Institute of Agricultural and Nutritional Sciences, Martin Luther University Halle-Wittenberg, Germany ' Faculty of Law and Economics, Martin Luther University Halle-Wittenberg, Germany

Abstract: We compare three procedures for eliciting individual risk attitudes: Holt and Laury (2002), Eckel and Grossman (2002) and the general willingness-to-take-risks question of the German socio-economic panel. Using a within-subject design, we carry out a classroom experiment with students who are enrolled in the degree programs Physics, Computer Sciences, Agricultural Sciences, Law, and History. We find that the risk attitudes as measured by the three procedures diverge substantially. This poses a serious challenge to the validity of these measurement instruments.

Keywords: risk-attitude; Eckel-and-Grossman procedure; Holt-and-Laury procedure; self-reported willingness-to-take-risks; bounded rationality.

DOI: 10.1504/IJIDS.2023.132823

International Journal of Information and Decision Sciences, 2023 Vol.15 No.3, pp.221 - 242

Received: 31 Jul 2020
Accepted: 20 Mar 2021
Published online: 11 Aug 2023 *

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