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Bringing a Natural Experiment into the Laboratory: the Measurement of Individual Risk Attitudes

Author

Listed:
  • Zuzana Brokesova

    (University of Economics in Bratislava)

  • Cary Deck

    (College of Business and Public Policy University of Alaska Anchorage and Sam M. Walton College of Business, University of Arkansas and Economic Science Institute, Chapman University,)

  • Jana Peliova

    (Faculty of National Economy, University of Economics in Bratislava)

Abstract
Controlled laboratory experiments have become a generally accepted method for studying economic behavior, but there are two issues that regularly arise with such work. The first pertains to the ability to generalize experimental results outside the laboratory. While laboratory experiments are typically designed to mimic naturally occurring situations, ceteris paribus comparisons are rare. Using data from a promotional campaign by a bank and a matching laboratory experiment, we find similar patterns of risk taking behavior controlling for gender and age. The second issue pertains to the impact that the payment procedure in an experiment has on observed risk taking behavior. Specifically, we compare behavior on a risk taking task where that is the only task and payment is assured, where it is one of several similar tasks of which one will be randomly selected for payment, and where it is the only task but there is only a small probability of receiving payment. We find similar behavior across these three payment procedures.

Suggested Citation

  • Zuzana Brokesova & Cary Deck & Jana Peliova, 2016. "Bringing a Natural Experiment into the Laboratory: the Measurement of Individual Risk Attitudes," Working Papers 16-06, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:16-06
    as

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    File URL: http://www.chapman.edu/research-and-institutions/economic-science-institute/_files/WorkingPapers/McLaughlin-Friedman-Ad-Auction.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Natural Experiment; Laboratory Experiment; Experimental Methodology; Risk Attitudes;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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