دانلود کتاب Can cognitive skills and risk aversion explain inconsistent choices? An experiment

We study the consistency of risk preferences among undergraduate students in a
developing country. Our design allow us to elicit consistency at the individual level in
which each subject selects his or her most preferred lotteries under two different (but
related) risk elicitation tasks. In the first task, subjects choose one lottery out of six
alternatives, thus ruling out inconsistency. Our second task is a transformation of the
first task into a multiple price-list lottery, intended to examine whether the choice in
the first task is also revealed as preferred. Using these choices, we construct our
measures of preferences inconsistency, and analyze their correlation with cognitive
skills (as measured by Frederick (2005)’s Cognitive Reflection Test—CRT scores and
students’ GPAs) and risk preferences. We find that a low CRT score and a poor
academic performance are, in general, good predictors of inconsistent choices. Results
are mixed in terms of the role of risk aversion.
Keywords: Inconsistent choices, risk aversion, cognitive skills, experimental economics.