The formation of risk preferences through small-scale events

Silvia Angerer (), E. Dutcher, Daniela Glätzle-Rützler, Philipp Lergetporer () and Matthias Sutter ()
Authors registered in the RePEc Author Service: Daniela Glätzle-Rützler

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: Understanding how humans deal with risk is important, as it prevails in practically all dimensions of life. Large, macroeconomic shocks have been shown to influence risk-taking. We study in an experiment with 759 subjects whether small-scale, seemingly negligible, events also affect the formation of risk preferences. In line with a reinforcement learning framework, we find that subjects who won a random lottery took significantly more risk in a second lottery almost a year later. So, small-scale, random, events significantly affect the formation of risk preferences, while we also show that memories don’t matter.

Keywords: Reinforcement learning; risk preferences; preference formation; experiment (search for similar items in EconPapers)
JEL-codes: C91 D01 D83 (search for similar items in EconPapers)
Pages: 36
Date: 2021
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-isf
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https://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2021-24.pdf (application/pdf)

Related works:
Working Paper: The formation of risk preferences through small-scale events (2021)
Working Paper: The Formation of Risk Preferences through Small-Scale Events (2021)
Working Paper: The Formation of Risk Preferences through Small-Scale Events (2021)
Working Paper: The Formation of Risk Preferences Through Small-Scale Events (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2021-24

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