Erik Wengström
Studierektor forskarutbildning, Nationalekonomiska institutionen, Professor
Robust Inference in Risk Elicitation Tasks
Författare
Summary, in English
Recent experimental evidence suggests that noisy behavior correlates strongly with personal characteristics. Since decision noise leads to bias in most elicitation tasks, there is a risk of falsely interpreting noise-driven relationships as preference driven. This puts previous studies that found a negative relation between personality measures and risk aversion into perspective and in particular raises the question of how to achieve robust inference in this domain. This paper shows, by way of an economic experiment with subjects from all walks of life, that using structural estimation to model heterogeneity of noise in combination with a balanced design allows us to mitigate the bias problem. Our estimations show that cognitive ability is related to noisy behavior rather than risk preferences. We also find age and education to be strongly related to noise, but the personality characteristics obtained using the Big Five inventory are less related to noise and more robustly correlated to risk preferences.
Avdelning/ar
- Nationalekonomiska institutionen
Publiceringsår
2020-12-10
Språk
Engelska
Sidor
195-209
Publikation/Tidskrift/Serie
Journal of Risk and Uncertainty
Volym
61
Issue
3
Dokumenttyp
Artikel i tidskrift
Förlag
Springer
Ämne
- Economics
- Psychology (excluding Applied Psychology)
Aktiv
Published
ISBN/ISSN/Övrigt
- ISSN: 0895-5646