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

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 o...

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Published inJudgment and decision making Vol. 16; no. 5; pp. 1290 - 1313
Main Authors Brañas-Garza, Pablo, Estepa-Mohedano, Lorenzo, Jorrat, Diego, Orozco, Victor, Rascón-Ramírez, Ericka
Format Journal Article
LanguageEnglish
Published Tallahassee Society for Judgment and Decision Making 01.09.2021
Cambridge University Press
Subjects
Behavior
Data collection
Decision making
Economics
Experiments
field experiments
Holt Laury
Incentives
Monetary incentives
monetary payoffs
Preferences
Researchers
risk preferences
Technology adoption
Nigeria
Honduras
Spain
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ISSN1930-2975
1930-2975
DOI10.1017/S1930297500008433

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Summary: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.
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ISSN:1930-2975
1930-2975
DOI:10.1017/S1930297500008433