Risky choice in the limelight
This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laborato...
| Main Authors: | , , |
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| Format: | Article |
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Massachusetts Institute of Technology Press
2015
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| Online Access: | https://eprints.nottingham.ac.uk/30841/ |
| _version_ | 1848794073562873856 |
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| author | van den Assem, Martijn J. Baltussen, Guido van Dolder, Dennie |
| author_facet | van den Assem, Martijn J. Baltussen, Guido van Dolder, Dennie |
| author_sort | van den Assem, Martijn J. |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laboratory conditions, a simple prospect theory model with a path-dependent reference point provides a better explanation for subjects’ behavior than a flexible specification of expected utility theory. Additionally, our findings suggest that ambiguity aversion depends on being in the limelight, that passive experience has little effect on risk taking, and that reference points are determined by imperfectly updated expectations. |
| first_indexed | 2025-11-14T19:10:24Z |
| format | Article |
| id | nottingham-30841 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:10:24Z |
| publishDate | 2015 |
| publisher | Massachusetts Institute of Technology Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-308412020-05-04T20:12:12Z https://eprints.nottingham.ac.uk/30841/ Risky choice in the limelight van den Assem, Martijn J. Baltussen, Guido van Dolder, Dennie This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laboratory conditions, a simple prospect theory model with a path-dependent reference point provides a better explanation for subjects’ behavior than a flexible specification of expected utility theory. Additionally, our findings suggest that ambiguity aversion depends on being in the limelight, that passive experience has little effect on risk taking, and that reference points are determined by imperfectly updated expectations. Massachusetts Institute of Technology Press 2015 Article PeerReviewed van den Assem, Martijn J., Baltussen, Guido and van Dolder, Dennie (2015) Risky choice in the limelight. Review of Economics and Statistics . ISSN 1530-9142 (In Press) decision making under risk risky choice risk preferences risk aversion ambiguity aversion limelight accountability public scrutiny experience game show natural experiment laboratory experiment expected utility theory prospect theory http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00505 doi:10.1162/REST_a_00505 doi:10.1162/REST_a_00505 |
| spellingShingle | decision making under risk risky choice risk preferences risk aversion ambiguity aversion limelight accountability public scrutiny experience game show natural experiment laboratory experiment expected utility theory prospect theory van den Assem, Martijn J. Baltussen, Guido van Dolder, Dennie Risky choice in the limelight |
| title | Risky choice in the limelight |
| title_full | Risky choice in the limelight |
| title_fullStr | Risky choice in the limelight |
| title_full_unstemmed | Risky choice in the limelight |
| title_short | Risky choice in the limelight |
| title_sort | risky choice in the limelight |
| topic | decision making under risk risky choice risk preferences risk aversion ambiguity aversion limelight accountability public scrutiny experience game show natural experiment laboratory experiment expected utility theory prospect theory |
| url | https://eprints.nottingham.ac.uk/30841/ https://eprints.nottingham.ac.uk/30841/ https://eprints.nottingham.ac.uk/30841/ |