Search results

1 – 10 of 158
To view the access options for this content please click here
Book part

Glenn W. Harrison and E. Elisabet Rutström

We review the experimental evidence on risk aversion in controlled laboratory settings. We review the strengths and weaknesses of alternative elicitation procedures, the…

Abstract

We review the experimental evidence on risk aversion in controlled laboratory settings. We review the strengths and weaknesses of alternative elicitation procedures, the strengths and weaknesses of alternative estimation procedures, and finally the effect of controlling for risk attitudes on inferences in experiments.

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

To view the access options for this content please click here
Book part

Matteo M. Galizzi, Glenn W. Harrison and Marisa Miraldo

The use of behavioral insights and experimental methods has recently gained momentum among health policy-makers. There is a tendency, however, to reduce behavioral…

Abstract

The use of behavioral insights and experimental methods has recently gained momentum among health policy-makers. There is a tendency, however, to reduce behavioral insights applications in health to “nudges,” and to reduce experiments in health to “randomized controlled trials” (RCTs). We argue that there is much more to behavioral insights and experimental methods in health economics than just nudges and RCTs. First, there is a broad and rich array of complementary experimental methods spanning the lab to the field, and all of them could prove useful in health economics. Second, there are a host of challenges in health economics, policy, and management where the application of behavioral insights and experimental methods is timely and highly promising. We illustrate this point by describing applications of experimental methods and behavioral insights to one specific topic of fundamental relevance for health research and policy: the experimental elicitation and econometric estimation of risk and time preferences. We start by reviewing the main methods of measuring risk and time preferences in health. We then focus on the “behavioral econometrics” approach to jointly elicit and estimate risk and time preferences, and we illustrate its state-of-the-art applications to health.

To view the access options for this content please click here
Book part

Jeffrey P. Carpenter, Glenn W. Harrison and John A. List

There are several ways to define words. One is to ascertain the formal definition by looking it up in the dictionary. Another is to identify what it is that you want the…

Abstract

There are several ways to define words. One is to ascertain the formal definition by looking it up in the dictionary. Another is to identify what it is that you want the word-label to differentiate.

Details

Field Experiments in Economics
Type: Book
ISBN: 978-0-76231-174-3

To view the access options for this content please click here
Book part

Abstract

Details

Field Experiments in Economics
Type: Book
ISBN: 978-0-76231-174-3

To view the access options for this content please click here
Book part

James C. Cox and Glenn W. Harrison

Attitudes to risk play a central role in economics. Policy makers should know them in order to judge the certainty equivalent of the effects of policy on individuals. What…

Abstract

Attitudes to risk play a central role in economics. Policy makers should know them in order to judge the certainty equivalent of the effects of policy on individuals. What might look like a policy improvement when judged by the average impact could easily entail a welfare loss for risk averse individuals if the variance of expected impacts is wide compared to the alternatives.

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

To view the access options for this content please click here
Book part

Frank Heinemann

Measuring risk aversion is sensitive to assumptions about the wealth in subjects’ utility functions. Data from the same subjects in low- and high-stake lottery decisions…

Abstract

Measuring risk aversion is sensitive to assumptions about the wealth in subjects’ utility functions. Data from the same subjects in low- and high-stake lottery decisions allow estimating the wealth in a pre-specified one-parameter utility function simultaneously with risk aversion. This paper first shows how wealth estimates can be identified assuming constant relative risk aversion (CRRA). Using the data from a recent experiment by Holt and Laury (2002a), it is shown that most subjects’ behavior is consistent with CRRA at some wealth level. However, for realistic wealth levels most subjects’ behavior implies a decreasing relative risk aversion. An alternative explanation is that subjects do not fully integrate their wealth with income from the experiment. Within-subject data do not allow discriminating between the two hypotheses. Using between-subject data, maximum-likelihood estimates of a hybrid utility function indicate that aggregate behavior can be described by expected utility from income rather than expected utility from final wealth and partial relative risk aversion is increasing in the scale of payoffs.

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

To view the access options for this content please click here
Book part

Steffen Andersen, Glenn W. Harrison, Morten I. Lau and E. Elisabet Rutström

We review the use of behavior from television game shows to infer risk attitudes. These shows provide evidence when contestants are making decisions over very large…

Abstract

We review the use of behavior from television game shows to infer risk attitudes. These shows provide evidence when contestants are making decisions over very large stakes, and in a replicated, structured way. Inferences are generally confounded by the subjective assessment of skill in some games, and the dynamic nature of the task in most games. We consider the game shows Card Sharks, Jeopardy!, Lingo, and finally Deal Or No Deal. We provide a detailed case study of the analyses of Deal Or No Deal, since it is suitable for inference about risk attitudes and has attracted considerable attention.

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

To view the access options for this content please click here
Book part

Nathaniel T. Wilcox

Choice under risk has a large stochastic (unpredictable) component. This chapter examines five stochastic models for binary discrete choice under risk and how they combine…

Abstract

Choice under risk has a large stochastic (unpredictable) component. This chapter examines five stochastic models for binary discrete choice under risk and how they combine with “structural” theories of choice under risk. Stochastic models are substantive theoretical hypotheses that are frequently testable in and of themselves, and also identifying restrictions for hypothesis tests, estimation and prediction. Econometric comparisons suggest that for the purpose of prediction (as opposed to explanation), choices of stochastic models may be far more consequential than choices of structures such as expected utility or rank-dependent utility.

Details

Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

To view the access options for this content please click here
Book part

Glenn W. Harrison, Morten Igel Lau, Elisabet E. Rutström and Melonie B. Sullivan

We design experiments to jointly elicit risk and time preferences for the adult Danish population. The experimental procedures build on laboratory experiments that have…

Abstract

We design experiments to jointly elicit risk and time preferences for the adult Danish population. The experimental procedures build on laboratory experiments that have used traditional subject pools. The field experiments utilize field sampling designs that we developed, and procedures that were chosen to be relatively transparent in the field with non-standard subject pools. Our overall design was also intended to be a general template for such field experiments in other countries. We examine the characterization of risk over a wider domain for each subject than previous experiments, allowing more precise estimates of risk attitudes. We also examine individual discount rates over six time horizons, as the first stage in a panel experiment in which we revisit subjects to test consistency and stability of responses over time. Risk and time preferences are heterogeneous, varying by observable individual characteristics. On a methodological level, we implement a refinement of existing procedures which elicits much more precise estimates, and also mitigates framing effects.

Details

Field Experiments in Economics
Type: Book
ISBN: 978-0-76231-174-3

To view the access options for this content please click here
Book part

Glenn W. Harrison

If we are to examine the role of “controls” in different experimental settings, it is appropriate that the word be defined carefully. The Oxford English Dictionary (Second

Abstract

If we are to examine the role of “controls” in different experimental settings, it is appropriate that the word be defined carefully. The Oxford English Dictionary (Second Edition) defines the verb “control” in the following manner: “To exercise restraint or direction upon the free action of; to hold sway over, exercise power or authority over; to dominate, command.” So the word means something more active and interventionist than is suggested by it’s colloquial clinical usage. Control can include such mundane things as ensuring sterile equipment in a chemistry lab, to restrain the free flow of germs and unwanted particles that might contaminate some test.

Details

Field Experiments in Economics
Type: Book
ISBN: 978-0-76231-174-3

1 – 10 of 158