Decision Analysis Working Paper Abstract
Archive
WP030001
|
Title: An Empirical Investigation of the Assumptions of Risk-Value
Models
Authors: John
Butler The Ohio State University, James
Dyer The University of Texas, Jianmin
Jia The Chinese University of Hong Kong
Date: July 2002
Status: working paper
Do subjects make decisions consistent with risk-value tradeoffs?
One hundred and five undergraduate business students made risk and preference
judgments about lottery pairs in a series of paper surveys. The data
indicate that the subjects’ responses were consistent with risk independence
and other key assumptions of risk-value models for both perceived risk
and preference. Support is provided for the risk-value paradigm popular
in finance and psychology, and some extensions are considered.
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