Risky Choice in the Limelight

Research output: Scientific - peer-reviewArticle

Abstract

This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments, we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laboratory conditions, a simple prospect theory model with a path-dependent reference point provides a better explanation for subjects' behavior than a flexible specification of expected utility theory. In addition, our findings suggest that ambiguity aversion depends on being in the limelight, that passive experience has little effect on risk taking, and that reference points are determined by imperfectly updated expectations.
Original languageEnglish
Pages (from-to)318-332
JournalReview of Economics and Statistics
Volume98
Issue number2
DOIs
StatePublished - 2016

Cite this

Baltussen, G.; van den Assem, M.J.; van Dolder, Dennie / Risky Choice in the Limelight.

In: Review of Economics and Statistics, Vol. 98, No. 2, 2016, p. 318-332.

Research output: Scientific - peer-reviewArticle

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author = "G. Baltussen and {van den Assem}, M.J. and {van Dolder}, Dennie",
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Risky Choice in the Limelight. / Baltussen, G.; van den Assem, M.J.; van Dolder, Dennie.

In: Review of Economics and Statistics, Vol. 98, No. 2, 2016, p. 318-332.

Research output: Scientific - peer-reviewArticle

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