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Title:Small-scale changes in wealth and attitudes towards risk PDF Logo
Authors:Sousa, Sergio
Issue Date:2010
Series/Report no.:CeDEx discussion paper series 2010-11
Abstract:This paper reports on an experiment designed to examine the effects of small-scale changes in wealth on risk attitudes. We find that the money given prior to risky choices does not induce a change of subjects' risk preferences. This result supports a key assumption in a recent literature over calibration critique of decision theories. Furthermore, as the money given to subjects in our experiment is administered in between risky tasks and framed as a reward rather than a windfall gain, our result suggests that experimental findings reporting that a prior monetary gain induces individuals to take more risks (housemoney effect) may be more sensitive to prior experience with the riskriskelicitation task or framing of the money than previously thought.
Subjects:risk aversion
wealth effects
risk-elicitation
house-money effect
narrow framing
JEL:C91
D01
D81
Document Type:Working Paper
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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