Visual analog scales, standard gambles, and relative risk aversion.

Are Risk Averters Averse to Risky Gambles?∗

This paper defines local aversion to a risk index. I show that the local aversion to the Aumann and Serrano [2008] index of riskiness coincides with absolute risk aversion, and that the same applies for the Foster and Hart [2009] measure of riskiness. Using this “local consistency” I offer a new approach for axiomatizing the Aumann and Serrano index of riskiness and present other applications o...

Calibration Results for Non-Expected Utility Theories∗

Rabin [23] proved that a low level of risk aversion with respect to small gambles leads to a high level of risk aversion with respect to large gambles. Rabin’s arguments strongly depend on expected utility theory, but we show in this paper that similar arguments apply to many non expected utility theories, and to a certain extent, to theories dealing with uncertainty as well.

Esteem and Risk Aversion

We consider how the demand for esteem shapes risk-taking behavior. When individuals care about what other people think of them, and gambles are bundled with esteem, they may be especially risk-averse with respect to losses and risk-loving with respect to gains. We consider the implications of this postulate for labor markets, wage stickiness, high powered incentives, search, and related issues....

Risk Aversion and Expected-Utility Theory: Coherence for Small- and Large-Stakes Gambles

Measurement-induced focusing and the magnitude of loss aversion: The difference between comparing gains to losses and losses to gains

Research has identified loss aversion as a strong and robust phenomenon, but has also revealed some moderators affecting the magnitude of its effect on decision making. In the current article, we draw attention to the fact that even the measurement of loss aversion itself may affect its magnitude by inducing a focus on either losses or gains. In three studies, we provide empirical evidence for ...