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Seminar

Risk Preferences and Field Behavior: The Relevance of Higher-Order Risk Preferences

  • Series
    CREED Seminars
  • Speaker(s)
    Sebastian O. Schneider (Max Planck Institute for Research on Collective Goods, Germany)
  • Field
    Behavioral Economics
  • Location
    University of Amsterdam, Roeterseilandcampus, room E0.15
    Amsterdam
  • Date and time

    May 11, 2023
    16:00 - 17:15

Abstract
Using a new method, we measure the intensities of higher-order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theory, we find that higher-order risk preferences are strongly related to adolescents' field behavior, including prevention, health-related, and addictive behavior (like excessive smartphone usage), and financial decision-making. Most importantly, we show that ignoring prudence and temperance might yield largely misleading conclusions about the relation of risk aversion to field behavior. These findings persist in several robustness checks. Thus, we put previous work that ignored higher-order risk preferences into an encompassing perspective.

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