Risk Preferences in the Small for a Large Population

Abstract

We analyse risk preferences using an experiment with small-stake gambles and real incentives in a representative sample of 1,422 Dutch respondents. Our structural econometric model incorporates four individual-level parameters: Utility curvature, loss aversion, preferences towards the timing of uncertainty resolution, and the propensity to choose randomly rather than on the basis of preferences. The model incorporates observed and unobserved heterogeneity. We nd that socio-economic and demographic variables are signicantly correlated with preference parameters but are of minor importance compared to the unobserved heterogeneity component. All four parameters contribute to explaining the choices of the individuals in our sample, but preferences towards the timing of uncertainty resolution play a smaller role than the others.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 3 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.