Abstract
We design an experiment to study the consistency of risk preferences between lotteries that are resolved and paid in the present versus in the future. The results show that a substantial fraction of subjects (38.6%) exhibits a greater level of risk aversion for lotteries resolved and paid in the present than in the future. Additional treatments suggest that the effect is neither specific to gambles that are realized immediately, nor is due to steep discounting of future payoffs. Our experiment suggests that risk tolerance increases the farther in the future the gamble is realized.
Original language | English (US) |
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Pages (from-to) | 401-412 |
Number of pages | 12 |
Journal | Managerial and Decision Economics |
Volume | 27 |
Issue number | 6 |
DOIs | |
State | Published - Sep 2006 |
Externally published | Yes |
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management
- Management Science and Operations Research
- Management of Technology and Innovation