Template-Type: ReDIF-Paper 1.0
Author-Name: Burkhard Schipper
Author-Name-First: Burkhard
Author-Name-Last: Schipper
Author-Name: Wenjun Ma
Author-Name-First: Wenjun
Author-Name-Last: Ma
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Does Exposure to Unawareness Affect Risk Preferences? A Preliminary Result
Abstract: One fundamental assumption often made in the literature on unawareness is that risk preferences are invariant to changes of awareness. We study how exposure to unawareness affects choices under risk. Participants in our experiment choose repeatedly between varying sure outcomes and a lottery in 3 phases. All treatments are exactly identical in phase 1 and phase 3, but differ in phase 2. There are five different treatments pertaining to the lottery faced in phase 2: The control treatment (i.e., a standard lottery), the treatment with awareness of unawareness of lottery outcomes but known number of outcomes, the treatment with awareness of unawareness of outcomes but with unknown number of outcomes, the treatment with unawareness of unawareness of some outcomes, and the treatment with an ambiguous lottery. We study both whether behavior differs in phase 3 across treatments (between subjects effect) and whether differences of subjects' behavior between phases 1 and phase 3 differs across treatments (within subject effects). We observe no significant treatment effects.
Length: 33
File-URL: https://repec.dss.ucdavis.edu/files/WVJm4GHdTotRaGh7H598RuSB/17-1.pdf
File-Format: application/pdf
Number: 255
Classification-JEL: C91, C92, D81, D87
KeyWords: Unawareness, Awareness of unawareness, Risk aversion, Experiments
Creation-Date: 20170501
Handle: RePEc:cda:wpaper:255