Risky choice in the limelight

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van den Assem, Martijn J., Baltussen, Guido and van Dolder, Dennie (2015) Risky choice in the limelight. Review of Economics and Statistics . ISSN 1530-9142 (In Press)

Full text not available from this repository.

Official URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00505

Abstract

This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laboratory conditions, a simple prospect theory model with a path-dependent reference point provides a better explanation for subjects’ behavior than a flexible specification of expected utility theory. Additionally, our findings suggest that ambiguity aversion depends on being in the limelight, that passive experience has little effect on risk taking, and that reference points are determined by imperfectly updated expectations.

Item Type:

Article

RIS ID:

https://nottingham-repository.worktribe.com/output/993327

Additional Information:

This is the manuscript version of the article accepted for publication in Review of Economics and Statistics

Keywords:

decision making under risk, risky choice, risk preferences, risk aversion, ambiguity aversion, limelight, accountability, public scrutiny, experience, game show, natural experiment, laboratory experiment, expected utility theory, prospect theory

Schools/Departments:

University of Nottingham, UK > Faculty of Social Sciences > School of Economics

Identification Number:

https://doi.org/10.1162/REST_a_00505

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