On the role of monetary incentives in risk preference elicitation experiments

Hackethal, Andrea; Kirchler, Michael; Laudenbach, Christine; Razen, Michael; Weber, Annika

doi:10.1007/s11166-022-09377-w

Cited by 14 publications

(8 citation statements)

References 56 publications

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“…Contrary to our expectations (as specified in our pre-registration at the Open Science Framework [OSF]), we failed to find (strong statistical) evidence in favour of the hypothesis that monetary incentives matter for risky choices and intertemporal choices at the group level when we consider the proportion of participants who chose the less incentivised option (i.e., safer option in Risky Task, sooner option in Intertemporal Task) for every choice. This is in line with Hackethal et al (2022) who also report not finding statistically significant differences for risky choices between, and within, participants in their incentivized and nonincentivized schemes. Similarly, the main takeaway message from the study of Brañas -Garza et al (2022) is that paid and hypothetical intertemporal choices are mostly the same.…”

Section: Can a Single Model Account For Both Risky Choices And Inter-...supporting

confidence: 87%

Can a single model account for both risky choices and inter-temporal choices? Testing the assumptions underlying models of risky-intertemporal choice: A conceptual replication of Luckman et al. (2018)

Fidanoski,

Dixir,

Ortmann

2023

Preprint

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Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. Luckman et al. (2018), following a well-established tradition in psychology, had first-year psychology students participate that were rewarded with non-monetary course credits (see also Luckman et al. 2020), casting shadows of doubt on whether their participants were properly incentivised. Proper incentivization is a long-standing bone of contention among experimentally working economists and psychologists, last but not least when it comes to the elicitation of preferences of any kind. Another reason to be sceptical is that the experiment was not properly powered up; the no-difference results reported by the authors might be spurious. In our conceptual replication, we find significant differences between the risky and intertemporal choices at both the group and individual level. We find further that there is no significant difference between choices made by participants that are paid a flat incentive and participants that are paid under the random incentive scheme, at the group level. We find that order effects matter for intertemporal choices, but not for risky choices. At the individual level, we find evidence in favour of the model that assumes a common value function, but separate choice functions. This result is robust across the incentive systems, and order of presentation, but sensitive to different prior distributions.

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Section: Can a Single Model Account For Both Risky Choices And Inter-...supporting

confidence: 87%

Can a single model account for both risky choices and inter-temporal choices? Testing the assumptions underlying models of risky-intertemporal choice: A conceptual replication of Luckman et al. (2018)

Fidanoski,

Dixir,

Ortmann

2023

Preprint

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“…Consequently, there is considerable uncertainty surrounding whether the risk preferences elicited reflect an individual's a itudes toward risk, especially concerning financial decision-making. However, a recent study found that no significant differences in behavior were observed among subjects both between and within the incentivized and non-incentivized regimes [31].…”

Section: Literature Reviewmentioning

confidence: 95%

Risk Preferences and Entrepreneurial Decision-Making: Evidence from Experimental Methods in Vietnam

Tran,

Pham

2024

Sustainability

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This study investigates the relationship between risk preferences and entrepreneurial decisions within the Vietnamese context through controlled laboratory experiments. Specifically, we examine whether individuals with higher levels of risk aversion are more likely to become fixed-wage employees, while those with a propensity for risk-taking are more likely to pursue entrepreneurial ventures. Our findings underscore a significant relationship between risk aversion and the initiation of new businesses at the point of decision-making. Individuals exhibiting greater risk aversion demonstrate a decreased likelihood of venturing into entrepreneurship compared to their risk-taking or risk-neutral counterparts. Importantly, this relationship withstands variations in experimental measures of risk preferences, affirming its robustness across diverse contexts. These insights contribute to a deeper understanding of the role of risk attitudes in shaping entrepreneurial behavior and hold implications for policy interventions aimed at fostering entrepreneurship in Vietnam.

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“…Likewise, measures of time preferences were validated in 53 countries (Wang et al 2016;Rieger et al 2021), and social preferences were validated in the United States, Kenya, and Iran (Sapienza et al 2013;Bauer et al 2020;Kosfeld and Sharafi 2022). In addition, recent experimental work finds that preference measures of risk and time preferences based on hypothetical, non-incentivized survey measures are largely comparable to measures based on incentivized elicitation (Brañaz Garza et al 2023;Hackethal et al 2023).…”

Section: Data and Samplementioning

confidence: 99%