Title

Risk Attitudes, Randomization To Treatment, And Self-Selection Into Experiments

Keywords

Experiments; Randomization; Risk aversion; Sample selection

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. © 2009.

Publication Date

6-1-2009

Publication Title

Journal of Economic Behavior and Organization

Volume

70

Issue

3

Number of Pages

498-507

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1016/j.jebo.2008.02.011

Socpus ID

77951952940 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/77951952940

This document is currently not available here.

Share

COinS