TY - JOUR
T1 - Individual classification of strong risk attitudes
T2 - An application across lottery types and age groups
AU - Kellen, David
AU - Mata, Rui
AU - Davis-Stober, Clintin P.
N1 - Funding Information:
David Kellen, Department of Psychology, Syracuse University. Rui Mata, Center for Cognitive and Decision Sciences, Department of Psychology, University of Basel, Switzerland. Clintin P. Davis-Stober, Department of Psychological Sciences, University of Missouri. We are grateful to Tony Marley, Loreen Mamerow and Michael Spektor for their valuable comments and suggestions. We also thank Markus Steiner and Jennifer Kurath for their help with the data collection. Correspondence concerning this article should be addressed to David Kellen (davekellen@gmail.com).
Publisher Copyright:
© 2017, Psychonomic Society, Inc.
PY - 2017/1/6
Y1 - 2017/1/6
N2 - Empirical evaluations of risk attitudes often rely on a weak definition of risk that concerns preferences towards risky and riskless options (e.g., a lottery vs. a sure outcome). A large body of work has shown that individuals tend to be weak risk averse in choice contexts involving risky and riskless gains but weak risk seeking in contexts involving losses, a phenomenon known as the reflection effect. Recent attempts to evaluate age differences in risk attitudes have relied on this weak definition, testing whether the reflection effect increases or diminishes as we grow older. The present work argues that weak risk attitudes have limited generalizability and proposes the use of a strong definition of risk that is concerned with preferences towards options with the same expected value but different degrees of risk (i.e., outcome variance). A reanalysis of previously-published data and the results from a new study show that only a minority of individuals manifests the reflection effect under a strong definition of risk, and that, when facing certain lottery-pair types, older adults appear to be more risk seeking than younger adults.
AB - Empirical evaluations of risk attitudes often rely on a weak definition of risk that concerns preferences towards risky and riskless options (e.g., a lottery vs. a sure outcome). A large body of work has shown that individuals tend to be weak risk averse in choice contexts involving risky and riskless gains but weak risk seeking in contexts involving losses, a phenomenon known as the reflection effect. Recent attempts to evaluate age differences in risk attitudes have relied on this weak definition, testing whether the reflection effect increases or diminishes as we grow older. The present work argues that weak risk attitudes have limited generalizability and proposes the use of a strong definition of risk that is concerned with preferences towards options with the same expected value but different degrees of risk (i.e., outcome variance). A reanalysis of previously-published data and the results from a new study show that only a minority of individuals manifests the reflection effect under a strong definition of risk, and that, when facing certain lottery-pair types, older adults appear to be more risk seeking than younger adults.
KW - Age differences
KW - Reflection effect
KW - Risk attitude
KW - p-additive utility
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U2 - 10.3758/s13423-016-1212-5
DO - 10.3758/s13423-016-1212-5
M3 - Article
C2 - 28063131
AN - SCOPUS:85008428288
SN - 1069-9384
VL - 24
SP - 1341
EP - 1349
JO - Psychonomic Bulletin and Review
JF - Psychonomic Bulletin and Review
IS - 4
ER -