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Debt aversion experiment: A replication with sophisticated participants

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  • Kazunori Yakushiji
  • Jieyi Duan
  • Nobuyuki Hanaki

Abstract

We conduct a replication experiment, with sophisticated student participants, of the three main treatments of the debt aversion experiment by Mart´ınez-Marquina and Shi (2024). While participants in our experiment have chosen return maximizing strategies much more frequently than those in Mart´ınez-Marquina and Shi (2024), our findings partially corroborate their observations that participants burdened with debt tend to forego, at least initially, the “certain and maximum profit investment opportunity” in favor of prioritizing debt repayment.

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  • Kazunori Yakushiji & Jieyi Duan & Nobuyuki Hanaki, 2024. "Debt aversion experiment: A replication with sophisticated participants," ISER Discussion Paper 1269, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:1269
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2024/DP1269.pdf
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    References listed on IDEAS

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    1. Schleich, Joachim & Faure, Corinne & Meissner, Thomas, 2021. "Adoption of retrofit measures among homeowners in EU countries: The effects of access to capital and debt aversion," Energy Policy, Elsevier, vol. 149(C).
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