dc.contributor.author | Holden, Stein T. | |
dc.contributor.author | Tilahun, Mesfin | |
dc.coverage.spatial | Ethiopia | en_US |
dc.date.accessioned | 2020-08-20T11:38:26Z | |
dc.date.available | 2020-08-20T11:38:26Z | |
dc.date.issued | 2020 | |
dc.identifier.isbn | 978-82-7490-284-8 | |
dc.identifier.uri | https://hdl.handle.net/11250/2673199 | |
dc.description.abstract | The risky investment game of Gneezy and Potters (1997) has been a popular tool used to estimate risk tolerance and myopic loss aversion. We have assessed whether a simple one-shot version of this game that is attractive as a simple tool to elicit risk tolerance among respondents with limited education, can lead to biased estimates of risk aversion due to endowment effects. We use a field experiment with a pool of young business group members with limited education to test for the potential bias associated with the initial endowment allocation. We find a highly significant endowment effect which may explain low investment levels and exaggerated measures of risk aversion where this game has been used to estimate risk aversion. We develop and test a more balanced version of the risk investment game and demonstrate that it gives less bias due to endowment effects than the standard design and a full risk design that creates an endowment effect in the opposite direction, indicating that loss aversion may not be the primary cause of the endowment effect | en_US |
dc.language.iso | eng | en_US |
dc.publisher | Norwegian University of Life Sciences, Ås | en_US |
dc.relation.ispartofseries | CLTS Working paper;01/20 | |
dc.rights | Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal | * |
dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/4.0/deed.no | * |
dc.title | Endowment Effects and Loss Aversion in the Risky Investment Game | en_US |
dc.type | Working paper | en_US |
dc.subject.keyword | Gender | |
dc.subject.keyword | Investment | |
dc.subject.keyword | Risk | |