LFIN Seminar - Ranoua BOUCHOUICHA

Ranoua BOUCHOUICHA

(Ghent University)

will give a presentation on

Choice lists and ‘standard patterns’ of risk-taking

Abstract :
The fourfold pattern of risk attitudes has been called ‘the most distinctive implication of prospect theory’. Here, we compare risk-taking measured with certainty equivalents (CEs) to risk-taking when presenting the choices in the CE-lists one- by-one in a binary choice setup. CE data indicate a clear fourfold pattern. Binary choices, on the other hand, indicate uniform risk aversion for gains, and uniform risk seeking for losses. This surprising result appears pervasive based on 1) an online experiment with rich data; and 2) a meta-analysis of CEs calculated from existing PT estimates. Our results thus challenge the predictive ability of PT beyond the restrictive realm of CEs, which are arguably a poor proxy for most real-world decisions.

• Ranoua BOUCHOUICHA : https://www.ranouabouchouicha.com