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Reconsidering Risk Aversion / Daniel J. Benjamin, Mark Alan Fontana, Miles S. Kimball.
- Format:
- Book
- Author/Creator:
- Benjamin, Daniel J.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28007.
- NBER working paper series no. w28007
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- Risk aversion is typically inferred from real or hypothetical choices over risky lotteries, but such "untutored" choices may reflect mistakes rather than preferences. We develop a procedure to obtain a better measure of normatively relevant preferences: after eliciting untutored choices, we confront participants with their choices that are inconsistent with intertemporal-expected-utility axioms and allow them to reconsider their choices. We demonstrate this procedure via a survey about hypothetical retirement investment choices administered to 596 Cornell students. We find that, on average, reconsidered choices are more consistent with almost all axioms, with one exception related to a counterfactual reference point.
- Notes:
- Print version record
- October 2020.
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