The Binary Lottery Procedure does not induce risk neutrality in the Holt & Laury and Eckel & Grossman tasks

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2021
Volume: 185
Issue: C
Pages: 348-369

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We test whether the binary lottery procedure makes participants behave as if they are risk neutral in the Holt and Laury (2002) and Eckel and Grossman (2002) tasks. Depending on the task, we find that less than half of the participants behave as if risk neutral. In fact, when we compare the distribution of choices, we find no significant difference to standard experiments that did not use the binary lottery procedure. Using a structural model we find modest evidence that the binary lottery procedure might move participants at least slightly towards risk neutrality.

Technical Details

RePEc Handle
repec:eee:jeborg:v:185:y:2021:i:c:p:348-369
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25