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Dealing with risk: Gender, stakes, and probability effects

Author

Listed:
  • Irene Comeig

    (ERICES and University of Valencia)

  • Charles A. Holt

    (University of Virginia)

  • Ainhoa Jaramillo-Gutiérrez

    (ERICES and Jaume I University, Castellón)

Abstract

This paper investigates how subjects deal with financial risk, both "upside" (with a small chance of a high payoff) and "downside" (with a small chance of a low payoff). We find that the same people who avoid risk in the downside setting tend to make more risky choices in the upside one. The experiment is designed to disentangle the probability-weighting and utility-curvature components of risk attitudes, and to differentiate settings in which gender differences arise from those in which they do not. Women are more risk averse for downside risks, but gender differences are diminished for upside risks.

Suggested Citation

  • Irene Comeig & Charles A. Holt & Ainhoa Jaramillo-Gutiérrez, 2015. "Dealing with risk: Gender, stakes, and probability effects," Discussion Papers in Economic Behaviour 0215, University of Valencia, ERI-CES.
    • Handle: RePEc:dbe:wpaper:0215
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    File URL: https://www.uv.es/erices/RePEc/WP/2015/0215.pdf
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    References listed on IDEAS

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    Cited by:

    1. Juan Pineiro-Chousa & Marcos Vizcaíno-González & M. Ángeles López-Cabarcos, 2016. "Reputation, Game Theory and Entrepreneurial Sustainability," Sustainability, MDPI, vol. 8(11), pages 1-13, November.
    2. Boulu-Reshef, Béatrice & Comeig, Irene & Donze, Robert & Weiss, Gregory D., 2016. "Risk aversion in prediction markets: A framed-field experiment," Journal of Business Research, Elsevier, vol. 69(11), pages 5071-5075.
    3. Irene Comeig & Ainhoa Jaramillo-Gutiérrez & Federico Ramírez, 2022. "Are credit screening contracts designed for men?," Service Business, Springer;Pan-Pacific Business Association, vol. 16(4), pages 883-905, December.
    4. Juan Pineiro-Chousa & Marcos Vizcaíno-González & María Ángeles López-Cabarcos & Noelia Romero-Castro, 2017. "Managing Reputational Risk through Environmental Management and Reporting: An Options Theory Approach," Sustainability, MDPI, vol. 9(3), pages 1-15, March.

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    More about this item

    Keywords

    risk aversion; probability weighting; rank-dependent utility; gender differences; experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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