Econometric Estimates of Attitudes Towards Risk

The presented work researches the effect of disappointment on attitudes towards risk. To investigate the question, an experiment with International Laboratory for Experimental and Behavioural Economics of HSE using the online platform Yandex.Toloka where participants were presented binary lottery choice problems wherefrom they had to pick a preferred lottery from each choice and state their expectations about the realization of the lottery chosen. The treatment was in form of revelation of whether some lottery realized with a higher outcome than expected, a lower one or the realization was the same as expected. For estimating the risk preferences, 15 models were fitted with different utility functions, probability weighting functions and methods of lotteries comparison. All models assumed that the risk preference of individual does not change in time. We obtained 3 results after estimating the risk attitudes. First, people may deviate from traditional economic models during an online experiment showing inconsistent preferences. Second, slight disappointment does not alter the risk preferences. Third, a revelation of some of the outcomes of the experiment to experimental subjects does not distort their original preferences. The results shed light on stability of risk preferences during the experiment and suggest the direction of further research of their stability in laboratory.