Title

Risk attitudes, randomization to treatment, and self-selection into experiments

Authors

Authors

G. W. Harrison; M. I. Lau;E. E. Rutstrom

Comments

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Abbreviated Journal Title

J. Econ. Behav. Organ.

Keywords

Risk aversion; Randomization; Sample selection; Experiments; SAMPLE SELECTION; FIELD EXPERIMENTS; TIME-PREFERENCES; ELICITING RISK; MODELS; DENMARK; ENTRY; BIAS; Economics

Abstract

Randomization to treatment is fundamental to statistical control in the design of experiments. However randomization implies some uncertainty about treatment condition. and individuals differ in their preferences towards taking on risk. Since human subjects often volunteer for experiments or are allowed to drop out of the experiment at any time if they want to, it is possible that the sample observed in an experiment might be biased because of the risk of randomization. On the other hand, the widespread use of a guaranteed show-up fee that is non-stochastic may generate sample selection biases of the opposite direction, encouraging more risk averse samples into experiments. We directly test these hypotheses that risk attitudes play a role in sample selection. Our results suggest that randomization bias does affect the overall level of risk aversion in the sample we observe. but that it does not affect the demographic mix of risk attitudes in the sample. We show that the common use of non-stochastic show-up fees can generate samples that are more risk averse than would otherwise have been observed. (C) 2009 Published by Elsevier B.V.

Journal Title

Journal of Economic Behavior & Organization

Volume

70

Issue/Number

3

Publication Date

1-1-2009

Document Type

Article

Language

English

First Page

498

Last Page

507

WOS Identifier

WOS:000267175900007

ISSN

0167-2681

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