scholarly journals Rethinking how risk aversion and impatience are linked with cognitive ability: Experimental findings from agricultural students and farmers

2021 ◽  
Author(s):  
Sven Gruener
Keyword(s):  
Experimental Study ◽  
Risk Aversion ◽  
Cognitive Ability ◽  
Real World ◽  
American Economic Review ◽  
Time Preferences ◽  
Monetary Incentives ◽  
P Values ◽  
Agricultural Students ◽  
Experimental Findings

Dohmen et al. (2010) describe in their paper, which has been published in the American Economic Review, that risk aversion and impatience are negatively related to cognitive ability. This topic is important because controlling for cognitive ability might be necessary if someone is interested in the link of risk preferences or time preferences to real-world outcomes. We re-examine their key results by conducting an experimental study using two subject pools (agricultural students and farmers) and three levels of monetary incentives. Similar to Dohmen et al. (2010), our study finds the above-described negative correlations. However, the strength of the association is smaller and the p-values are quite large.

scholarly journals Are Risk Aversion and Impatience Related to Cognitive Ability?

2010 ◽  
Vol 100 (3) ◽  
pp. 1238-1260 ◽  
Author(s):  
Thomas Dohmen ◽  
Armin Falk ◽  
David Huffman ◽  
Uwe Sunde
Keyword(s):  
Risk Aversion ◽  
Cognitive Ability ◽  
Representative Sample ◽  
Credit Constraints ◽  
Personal Characteristics ◽  
Choice Experiments ◽  
Monetary Incentives ◽  
Rule Out

This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aversion, and impatience over an annual horizon, and conduct two different, widely used, tests of cognitive ability. We find that lower cognitive ability is associated with greater risk aversion, and more pronounced impatience. These relationships are significant, and robust to controlling for personal characteristics, education, income, and measures of credit constraints. We perform a series of additional robustness checks, which help rule out other possible confounds.

scholarly journals How (un-)informative are experiments with “standard subjects” for other social groups? – The case of agricultural students and farmers

2021 ◽  
Author(s):  
Sven Gruener ◽  
Mira Lehberger ◽  
Norbert Hirschauer ◽  
Oliver Mußhoff
Keyword(s):  
Risk Aversion ◽  
Social Groups ◽  
Gift Exchange ◽  
Trust Game ◽  
Monetary Incentives ◽  
Negative Reciprocity ◽  
Ultimatum Bargaining Game ◽  
Experimental Subjects ◽  
Agricultural Students ◽  
Positive Reciprocity

This paper analyzes whether there is a gap between agricultural students’ and non-students’ (farmers’) behaviors in economic experiments which are often used to measure risk aversion, impatience, positive reciprocity, negative reciprocity, altruism, and trust. A further question is whether monetary incentives matter in this respect. We use the Holt and Laury procedure (2002) to elicit risk aversion, the procedure according to Laury et al. (2012) to measure impatience, a gift exchange game (Charness et al. 2004) to capture positive reciprocity, an ultimatum bargaining game (Güth et al. 1982) to assess negative reciprocity, a dictator experiment (Engel 2011) to gauge altruism, and a trust game (Kosfeld et al. 2005) to assess trust in others. We find no differences between agricultural students and farmers in their risk aversion, whereas the latter are fund to be considerably more impatient than the former. Positive and negative reciprocity is slightly more pronounced with farmers. Findings regarding altruism in the two groups are mixed and trust is somewhat more pronounced with farmers. The paper challenges approaches that assume that students can be used as standard experimental subjects whose behaviors can be generalized towards other populations.

Experimente und forstökonomische Fragen

2012 ◽  
Vol 163 (10) ◽  
pp. 417-421
Author(s):  
Urs Fischbacher
Keyword(s):  
Public Goods ◽  
Experimental Method ◽  
Forest Product ◽  
Time Preferences ◽  
Economic Research ◽  
Timber Production ◽  
Markets And Institutions ◽  
Experimental Findings ◽  
Forest Economic

Experiments and forest economic questions During the last decades experiments have gained great importance in economics. These experiments deal with questions that are of significance for forest economic research, too. Timber production, for example, is characterised by long-term decisions and, in addition, forestry produces important public goods. In this article the experimental method is introduced. Furthermore, experimental findings are presented, e.g., concerning time preferences and externalities, and possible applications for the study of forest product markets and institutions are outlined.

Relationships Between Cognitive and Driving Self-Awareness in Older Drivers

2020 ◽  
Author(s):  
Laurence Paire-Ficout ◽  
Sylviane Lafont ◽  
Marion Hay ◽  
Amandine Coquillat ◽  
Colette Fabrigoule ◽  
...  
Keyword(s):  
Experimental Study ◽  
Cohort Study ◽  
Cognitive Ability ◽  
Cognitive Skills ◽  
Self Regulation ◽  
Older Drivers ◽  
Driving Ability ◽  
Digit Symbol Substitution Test ◽  
Self Awareness ◽  
Subjective Data

Abstract Objectives Many older drivers incorrectly estimate their driving ability. The present study aimed to determine whether, and if so, to what extent unawareness of cognitive abilities affects self-awareness of driving ability. Methods Two successive studies were conducted. A cohort study investigated cognitive self-awareness and an experimental study examined driving self-awareness in older drivers. In each one, self-awareness was assessed by cross-analyzing objective (respectively Trail-Making Tests A & B and the Digit Symbol Substitution Test and driving performance of on-road assessment) and subjective data (responses about everyday cognitive skills and driving ability). Older drivers were then classified as being over-, correct or underestimators. The three cognitive and driving self-awareness profiles were then cross-analyzed. Results In the cohort study, 1,190 drivers aged 70 years or older were included. The results showed that 42.7% of older drivers overestimated their cognitive ability, 42.2% estimated it correctly, and 15.1% underestimated it. The experimental study included 145 participants from the cohort. The results showed that 34% of participants overestimated, 45% correctly estimated, and 21 % underestimated their driving ability. There was a significant relationship between cognitive and driving self-awareness profiles (p=0,02). This overlap was more marked in overestimators. Discussion Significant overlap between cognitive and driving self-awareness provides useful and new knowledge about driving in the aging population. Misestimation of cognitive ability could hamper self-awareness of driving ability, and consequently self-regulation of driving. It is now crucial to develop measures that promote self-awareness of ability.

scholarly journals To Whom Should I Send it? Sender Perspective on Incentivized Word of Mouth

2020 ◽  
Vol 13 (2) ◽  
pp. 127-138
Author(s):  
Christiana Yosevina Tercia ◽  
◽  
Thorsten Teicher ◽  
Keyword(s):  
Experimental Study ◽  
Word Of Mouth ◽  
Monetary Incentives ◽  
Related Activity ◽  
Mobile Coupons

This paper examines how consumers’ WOM-related activity can be steered by marketing measures. By conducting an experimental study using mobile coupons as a novel tool of word of mouth, we specifically investigate how monetary incentives foster senders’ decision in targeting particular receivers. Our results show that senders tend to share incentivized WOM with receivers deemed to be close to them when the amount of the incentive is unequal between sender and receiver, and information on the incentive is revealed to both sides. The different amount of incentive for senders and their receivers also leads senders to target receivers who are deal prone.

scholarly journals Time preferences and risk aversion: Tests on domain differences

2016 ◽  
Vol 53 (1) ◽  
pp. 29-54 ◽  
Author(s):  
Christos A. Ioannou ◽  
Jana Sadeh
Keyword(s):  
Risk Aversion ◽  
Time Preferences ◽  
Domain Differences

Young adults’ subjective and objective risk attitude in financial decision making

2018 ◽  
Vol 10 (3) ◽  
pp. 274-294 ◽  
Author(s):  
Andreas Oehler ◽  
Matthias Horn ◽  
Florian Wedlich
Keyword(s):  
Older Adults ◽  
Young Adults ◽  
Risk Aversion ◽  
Real World ◽  
Risk Attitude ◽  
Similar Degree ◽  
Content Type ◽  
Financial Decisions ◽  
Objective Risk ◽  
Subjective Risk

Purpose The purpose of this paper is to derive the determinants of young adults’ subjective and objective risk attitude in theoretical and real-world financial decisions. Furthermore, a comparison of the factors that influence young adults’ and older adults’ risk attitude is provided. Design/methodology/approach The paper relies on an experimental setting and a cross-sectional field study using data of the German central bank’s (Deutsche Bundesbank) PHF-Survey. Findings Young adults’ objective risk aversion is not constant but increases with stake sizes. Furthermore, young adults’ subjective risk attitude is a better predictor for their objective risk attitude than a set of commonly employed socio-demographics and economics like age or income. Moreover, young adults’ subjective risk attitude works as a mediator for the influence of their investable financial wealth on their objective risk attitude. Although young adults’ subjective risk attitude shows a gender effect, the influence of young adults’ gender on their objective risk attitude decreases with higher stake sizes. Compared to older adults, young adults generally show a similar degree of subjective risk aversion. However, due to stronger financial restrictions, young adults show a higher degree of objective risk aversion. Originality/value Although individuals’ financial outcomes depend on the financial behavior established in young adulthood, there is no study that simultaneously analyzes the determinants of young adults’ subjective and objective risk attitude in real-world financial decisions with a focus on young adults as a separate age group. The paper closes this gap in literature and additionally provides a comparison of the subsamples of young adults and older adults. The analysis in this paper reveals that young adults’ lower engagement in financial markets is primarily driven by their tight budget and not by a fundamental different subjective risk attitude.

Defending Discontinuity

2020 ◽  
pp. 102-133
Author(s):  
Jonathan Gilmore
Keyword(s):  
Experimental Study ◽  
Real World ◽  
Moral Character ◽  
Framing Effects ◽  
Prima Facie ◽  
The Real ◽  
Works Of Art ◽  
Continuity And Discontinuity

This chapter introduces and diagnoses the inadequacy of two prima facie plausible, but ultimately inadequate, arguments for the discontinuity thesis based on framing effects. The chapter then develops and defends a more powerful argument in discontinuity’s favor based on the functions of fictions. The chapter also looks at what turns on the debate between continuity and discontinuity, i.e., what consequences its resolution on the side of discontinuity has for the experimental study of the emotions; the role of responses to works of art as evidence of moral character; and the putatively edifying value of engaging with fictions in educating and refining attitudes about the real world.

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