Have your cake and eat it too: real effort and risk aversion in schoolchildren

There is a large body of evidence documenting gender differences in preferences and their effects on a range of behaviours (including health and risky behaviours) and choices (including education, labour market, savings, marriage, and fertility). A key issue in order to mitigate some of the undesirable effects of these differences (the tendency for boys to engage in more risky behaviours or for girls to avoid choices that might instead benefit them) is establishing how soon such differences arise. Gender differences in competitiveness and risk aversion have been widely documented both in the lab and the field (Falk et al, 2015), and more recently adapting experiments normally performed with adults to children (Samak, 2013; Harbaugh et al., 2002). We advance this literature with a study of primary school children which consists of an innovative two-stage task game addressing both effort and risk: in the first stage a real effort task allows children to accumulate points playing a video game, and in the second they play a lottery game in which probabilities are presented visually. The two-stage task game is designed in order to avoid both the valuation and the probability problems that children normally face in such tasks. Our findings confirm the existence of gender differences in risk aversion once controlling for performance in a gender neutral task in schoolchildren, and contribute a visual way of using lotteries with children that yields results consistent with rational behaviour