is there a life after holt and laury (2002)?
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Is There a Life After Holt and Laury (2002)?. Ganna Pogrebna [email protected] www.gannapogrebna.com March 11, 2010. G v P. Holt and Laury (2002) Procedure. G v P. Popularity of Holt and Laury (2002). Google Scholar: Holt and Laury (2002): 6,350 citations - PowerPoint PPT PresentationTRANSCRIPT
Holt and Laury (2002) ProcedureRelatively “Safe” Option Relatively “Risky” Option
1/10 of 2.00 LCU, 9/10 of 1.60 LCU 1/10 of 3.85 LCU, 9/10 of 0.10 LCU2/10 of 2.00 LCU, 8/10 of 1.60 LCU 2/10 of 3.85 LCU, 8/10 of 0.10 LCU3/10 of 2.00 LCU, 7/10 of 1.60 LCU 3/10 of 3.85 LCU, 7/10 of 0.10 LCU4/10 of 2.00 LCU, 6/10 of 1.60 LCU 4/10 of 3.85 LCU, 6/10 of 0.10 LCU5/10 of 2.00 LCU, 5/10 of 1.60 LCU 5/10 of 3.85 LCU, 5/10 of 0.10 LCU6/10 of 2.00 LCU, 4/10 of 1.60 LCU 6/10 of 3.85 LCU, 4/10 of 0.10 LCU7/10 of 2.00 LCU, 3/10 of 1.60 LCU 7/10 of 3.85 LCU, 3/10 of 0.10 LCU8/10 of 2.00 LCU, 2/10 of 1.60 LCU 8/10 of 3.85 LCU, 2/10 of 0.10 LCU9/10 of 2.00 LCU, 1/10 of 1.60 LCU 9/10 of 3.85 LCU, 1/10 of 0.10 LCU
10/10 of 2.00 LCU, 0/10 of 1.60 LCU 10/10 of 3.85 LCU, 0/10 of 0.10 LCU
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Popularity of Holt and Laury (2002) Google Scholar:
Holt and Laury (2002): 6,350 citations Eckel and Grossman (2002): 411 citations DoSpeRT Scale by Weber et al. (2002): 54 citations
JSTOR: Holt and Laury (2002): 65 citations Eckel and Grossman (2002): 29 citations DoSpeRT Scale by Weber et al. (2002): 6 citations
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Virtues and Vices Virtues:
please the referees cheap and easy to implement “relative” flavor
Vices: not much heterogeneity in the data
(majority of participants “slightly risk averse”/ “risk averse”) inconsistent participants cannot be classified may produce results that are not robust assumes CRRA utility function
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One Empirical Observation
Rank Description0-1 highly risk seeking2 very risk seeking 3 risk seeking4 risk neutral5 slightly risk averse6 risk averse7 very risk averse8 highly risk averse
9-10 extremely risk averse
Holt and Laury Measure (HL) Self-Reported Measure (SR)Rank Description
1 very risk loving2 risk loving3 slightly risk loving4 neutral5 slightly risk averse6 risk averse7 very risk averse
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One Empirical Observation (continued) Innsbruck, Austria (2006-2007) 161 participants
SRRisk
seekingRisk
neutralRisk
averse
HLRisk seeking 6 2 2 10Risk neutral 24 5 4 33Risk averse 62 39 17 118
92 46 23
p=0.000p=0.041
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Controlling for Gender Innsbruck, Austria (2006-2007) 161 participants
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 6 1 2 9Risk neutral 16 3 4 23Risk averse 40 18 8 66
62 22 14
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 0 1 0 1Risk neutral 8 2 0 10Risk averse 22 21 9 52
30 24 9
MEN
WO
MEN
One Empirical Observation (continued) Berlin, Germany (2008) 184 participants
SRRisk
seekingRisk
neutralRisk
averse
HLRisk seeking 13 2 1 16Risk neutral 19 11 7 37Risk averse 61 44 26 131
93 57 34
p=0.000p=0.470
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Controlling for Gender Berlin, Germany (2008) 184 participants
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 8 1 1 10Risk neutral 10 5 4 19Risk averse 35 21 14 70
53 27 19
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 5 1 0 6Risk neutral 9 6 3 18Risk averse 26 23 12 61
40 30 15
MEN
WO
MEN
One Empirical Observation (continued) New York, USA (2007-2009) 562 participants
SRRisk
seekingRisk
neutralRisk
averse
HLRisk seeking 45 5 4 54Risk neutral 96 30 15 141Risk averse 297 47 23 367
438 82 42
p=0.000p=0.000
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Controlling for Gender New York, USA (2007-2009) 562 participants
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 36 1 3 40Risk neutral 71 5 4 80Risk averse 214 9 5 228
321 15 12
SRRisk seeking Risk neutral Risk averse
HLRisk seeking 9 4 1 14Risk neutral 25 25 11 61Risk averse 83 38 18 139
117 67 30
MEN
WO
MEN
Possible Explanations and Questions Incentives “Risk” overconfidence People do not have CRRA utility function
Which measure has an impact on behavior: HL or SR?
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Which measure provides a “correct” representation of individual risk attitude?