The relative risk aversion measure that represents the risk preferences of a decision maker depends on the outcome variable that is used as the argument of the utility function, and on the way that outcome variable is defined or measured. In addition, the relationship between any two such...

This paper presents an integrated framework for evaluating the reduction of several types of mortality risk using a Choice Experiment (CE) approach, a type of stated preference technique. Using this approach, we can distinguish the marginal willingness to pay (MWTP) for the amount of risk...

Imagine that you own a five-outcome gamble with the following payoffs and probabilities: ($100, .20; $50, .20; $0, .20; −$25, .20; −$50, .20). What happens when the opportunity to improve such a gamble is provided by a manipulation that adds value to one outcome versus another outcome, particularly...

Commercial fishing involves both physical and financial risks. This combination questions whether fishermen are inherently risk-loving, whether physical and financial risk preferences are correlated, and how much preferences vary across fishermen. This paper addresses these questions with a...

As economics modeling moves from super rational decision makers to considering boundedly rational agents, some economic problems deserve a second look. This paper studies the effects of learning on the efficiency of search. Once learning is taken into account, the structure of information flow...

Call b your balance function at wealth W if you are indifferent between W and a 50–50 lottery with outcomes x and b(x). Given one b, u is arbitrary on one side of W but then determined on the other. Given two b‘s, u is arbitrary between the two W′ s but then determined elsewhere....

A behavioral condition of loss aversion is proposed and tested. Forty-nine students participated in experiments on binary choices among lotteries involving small scale real gains and losses. At the aggregate level, a significant proportion of the choices are in the direction predicted by loss...

Do participants make decisions consistent with risk-value tradeoffs? One hundred and five undergraduate business students made risk and preference judgments about lottery pairs in a series of paper surveys. The data indicate that the participants’ responses were generally consistent with the...

We conduct a battery of experiments in which agents make choices from several pairs of all-loss-lotteries. Using these choices, we estimate a representation of individual preferences over lotteries. We find statistically and economically significant departures from expected utility maximization...