Risk aversion relates to cognitive ability: Preferences or noise?
- Author(s)
- Ola Andersson, Hakan Holm, Jean-Robert Tyran, Erik Wengström
- Abstract
Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation may be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making rather than to risk preferences. (JEL: C81, C91, D12, D81).
- Organisation(s)
- Department of Economics, Vienna Center for Experimental Economics
- External organisation(s)
- Research Institute of Industrial Economics, Lund University, University of Copenhagen
- Journal
- Journal of the European Economic Association
- Volume
- 14
- Pages
- 1129–1154
- No. of pages
- 26
- ISSN
- 1542-4766
- DOI
- https://doi.org/10.1111/jeea.12179
- Publication date
- 10-2016
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502045 Behavioural economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/ccafb5d4-c7bb-49e2-8d11-ac58d322356f