On 30th January 2017 (1-2pm) Thomas Mayrhofer, Professor of Economics at the FH Stralsund and Harvard Medical School, will give a presentation about “Exploring the consistency of higher-order risk preferences" in Q4.245. Afterwards, Mr. Mayrhofer will be available for questions and discussions. His presentation is part of https://wiwi.uni-paderborn.de/dep1/me/research/discussing-research/seam/.
In this study we measure higher-order risk preferences and their consistency. We explore the role of country differences, the variation of stakes, and the framing of lotteries. We observe a robust dichotomous pattern of choice behavior in China, in the USA and in Germany. A large majority of choices are consistent with a preference for either (i) combining “good” outcomes with “bad” ones or (ii) combining “good” with “good”. We also find this pattern after a tenfold increase in stakes.
Finally, our results reveal that this pattern is strengthened through displaying the lotteries in compound rather than reduced form. We explore potential explanations for the framing effect.