Risk Aversion in the Laboratory

Many experimental economists have been interested in measuring the level of risk aversion as well as the determinants of risk aversion. These studies often take place in a controlled, laboratory setting and designing an experiment which will elicit responses which are true to life is essential. In “Risk Aversion in the Laboratory,” Harrison and Rutström…

Risk Aversion, Impatience and Cognitive Ability

Are smart people risk averse? Are dumb people impatient? This is what Thomas Dohmen, Armin Falk, David Huffman, Uwe Sunde explore in their 2007 Discussion paper. Using data from a choice experiment of 1000 German adults, the authors tested for risk aversion using a Holt & Laury framework, and for impatience by varying the annual…