Ambiguity and risk measures in the lab and students’ real-life borrowing behavior

Kim Fairley*, Utz Weitzel

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


This study analyzes the external validity of experimentally elicited ambiguity aversion, likelihood insensitivity and risk aversion on real-life decision-making in the field of student loans. Our main finding is that ambiguity aversion, likelihood insensitivity and risk aversion are not related to the decision to take out a student loan nor to the amount students decide to borrow, conditional on having a loan. We discuss our results in the context of recent advances to relate lab measures of ambiguity aversion and likelihood insensitivity to real economic decisions.

Original languageEnglish
Pages (from-to)85-98
Number of pages14
JournalJournal of Behavioral and Experimental Economics
Publication statusPublished - 1 Apr 2017
Externally publishedYes


  • Ambiguity aversion
  • Borrowing behavior
  • Likelihood insensitivity
  • Risk aversion
  • Student loans

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