The Fourfold Pattern of Risk Attitudes in Choice and Pricing Tasks*


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     This research was funded by grants from the National Science Foundation and the Preferences Network of the MacArthur Foundation. We thank Mary Ewers, Aaron Kaminsky and Irana Abibova for help running the experiments. We also thank Colin Camerer, Stefano DellaVigna, John Duffy, Drew Fudenberg, Ed Glaeser, David Laibson, George Loewenstein, Muriel Niederle, Matthew Rabin, Al Roth, Stefan Trautmann and seminar participants at Berkeley, Case Western, CMU, Cornell, Harvard, Syracuse and UCLA for helpful comments and conversations.


We examine the robustness of the fourfold pattern of risk attitudes under two elicitation procedures. We find that individuals are, on average, risk-seeking over low-probability gains and high-probability losses and risk-averse over high-probability gains and low-probability losses when we elicit prices for the gambles. However, a choice-based elicitation procedure, where participants choose between a gamble and its expected value, yields individual decisions that are indistinguishable from random choice. Sensitivity to elicitation procedure holds between and within participants, and remains when participants are allowed to review and change decisions. The price elicitation procedure is more complex; this finding may be further evidence that an increase in cognitive load exacerbates behavioural anomalies.