Asset integration, risk taking and loss aversion in the laboratory / William G. Morrison (Wilfrid Laurier University), Robert Oxoby (University of Calgary and IZA) ; IZA Institute of Labor Economics
VerfasserMorrison, William G. ; Oxoby, Robert J.
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, March 2019
Elektronische Ressource
Umfang1 Online-Ressource (28 Seiten) : Diagramme
SerieDiscussion paper ; no. 12268
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Asset integration, risk taking and loss aversion in the laboratory [0.88 mb]
Verfügbarkeit In meiner Bibliothek
Zusammenfassung (Englisch)

We report on a laboratory experiment testing for the presence of loss aversion, as separate from risk aversion, utilizing an asset integration protocol designed to ensure that a loss of cash provided by the experimenter is viewed as a real loss by experimental participants. Our experimental design augments the Holt-Laury risk preference elicitation methodology to assess how individuals choose between a safe option and a riskier lottery. When the money at stake is viewed as the individual's own money, one of the lottery outcomes is in the domain of losses. Our results confirm that individuals display an additional reluctance to participate in a mixed domain lottery beyond that predicted by risk aversion. We show that only preference functions incorporating loss aversion are able to generate predicted behaviour that matches our results.