Risk Preferences Revealed Through Non-Forced Choices

Last registered on September 10, 2020

Pre-Trial

Trial Information

General Information

Title
Risk Preferences Revealed Through Non-Forced Choices
RCT ID
AEARCTR-0004038
Initial registration date
March 21, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
March 23, 2019, 8:20 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
September 10, 2020, 6:32 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Primary Investigator

Affiliation
University of St Andrews

Other Primary Investigator(s)

Additional Trial Information

Status
Withdrawn
Start date
2019-03-24
End date
2020-07-31
Secondary IDs
Abstract
This project aims to understand if peoples' choices under risk are more likely to reveal preferences that conform to some foundational theoretical properties of risk-preference consistency when -contrary to what is the norm in decision experiments- people are not forced to choose. The incentivized laboratory experiment that will be conducted will feature two rounds of decisions over the same menus of lotteries. Subjects in the control group will be forced to choose in both rounds and at every menu they are presented with. Subjects in the treatment group will be allowed to delay their choice in the first round. Comparing the consistency of subjects' behaviour across groups has the potential to offer a novel robustness check for existing forced-choice methods of risk-preference elicitation.
External Link(s)

Registration Citation

Citation
Gerasimou, Georgios. 2020. "Risk Preferences Revealed Through Non-Forced Choices." AEA RCT Registry. September 10. https://doi.org/10.1257/rct.4038
Former Citation
Gerasimou, Georgios and Georgios Gerasimou. 2020. "Risk Preferences Revealed Through Non-Forced Choices." AEA RCT Registry. September 10. https://www.socialscienceregistry.org/trials/4038/history/75644
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2019-03-24
Intervention End Date
2020-07-31

Primary Outcomes

Primary Outcomes (end points)
1) Are there significant differences between forced- and non-forced-choice subjects' behaviour in their degree of conformity with:
(a) First-order stochastic dominance.
(b) Second-order stochastic dominance.
(c) The Independence axiom of preferences under risk.
(d) The Betweenness axiom of preferences under risk.

2. Are there significant differences in the magnitute of the "Common Ratio effect" and a variant of the Kahneman and Tversky (1979) version of the "Allais paradox" between the forced- and non-forced-choice groups?

3. Are there significant differences in the above outcomes between subjects in the forced-choice group and subjects in the non-forced-choice group who never delayed any choices?

4. Are there significant differences in the above outcomes between subjects in the forced-choice group and subjects in the non-forced-choice group who delayed choice at least once?

5. Are there significant differences in the active-choice intertemporal consistency between subjects in the forced- and non-forced-choice groups?

6. Are reversals in the subjects' revealed attitude to risk more likely in the forced-choice group (including self-forced)?

7. In the non-forced-choice group, does the decision to delay choice at a menu depend on the expected value and the maximum prizes of the lotteries in that menu?

8. In the non-forced-choice group, does the decision to delay choice at a menu depend on the cost of delaying choice?

9. In the non-forced-choice group, is it more likely for subjects to delay choice at menus in which the lotteries are not ranked by second-order stochastic dominance or, more generally, when the complexity of the decision problem increases?

10. Does the incidence of stochastic-dominance violations in menus that feature equivalent lotteries depend on the way in which lotteries are described?
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Subjects will be asked to make decisions from a series of binary menus of money lotteries in an incentivized laboratory experiment. The same menus of lotteries will be presented in two rounds and subjects will be asked to make a decision at each menu in each round. The order of presentation will vary randomly between subjects and between rounds. Subjects will be reminded of the decision they made at each menu in the first round before they are asked to make a decision from it again in the second round.

Subjects in the control group ("forced-choice") will be asked to choose one of the available lotteries from each menu in both rounds. Subjects in the treatment group ("non-forced-choice") will be asked in the first round to either choose one of the available lotteries or to choose "I'm not choosing now". In the second round, these subjects will also be asked to choose a lottery from each menu.

Subjects will be allocated an amount "a" at the beginning of the experiment. Subjects in the control group ("forced-choice") will be asked to choose one of the available lotteries from each menu in both rounds. Subjects in the treatment group ("non-forced-choice") will be asked in the first round to either choose one of the available lotteries or to choose "I'm not choosing now". In the second round, these subjects will also be asked to choose a lottery from each menu.

At the end of the experiment, one menu will be randomly selected for each subject. Subjects will win the lottery they chose from that menu in the second round, which will then be played out for them. In addition to their lottery winnings, they will receive: (a) their initially allocated amount "a" if they chose the same lottery at that menu in both rounds; (b) a fraction "d" of their initially allocated amount if they chose different lotteries at that menu in the first and second rounds; (c) [relevant in the "non-forced-choice" group] fractions "b" or "c" of their initially allocated amount "a" if they chose "I'm not choosing now" at that menu in the first round, with a > b > c > d.
Experimental Design Details
Randomization Method
The payoff-relevant randomly selected menu will be chosen uniform-randomly by a computer.

The lottery to be won by each participant will be played out publicly by randomly drawing an integer number using a certified random-number generator (www.random.org). It will be explained to subjects beforehand how each number that could be drawn is mapped to one of the possible monetary outcomes for each lottery.
Randomization Unit
Experimental sessions.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
11 experimental sessions.
Sample size: planned number of observations
260 (on average, 23.6 per session).
Sample size (or number of clusters) by treatment arms
100 subjects in the control group and 160 subjects in the treatment group (80 per treatment).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
University of St Andrews Teaching and Research Ethics Committee (UTREC)
IRB Approval Date
2019-01-10
IRB Approval Number
EC14020

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials