본문 바로가기
  • Home

Is Risk Aversion Related to Asymmetric Information Suggested by Cheap Talk and Decision Making Time under Uncertainty?: Experimental Economics Approach

  • Journal of Insurance and Finance
  • 2015, 26(3), pp.57-93
  • Publisher : Korea Insurance Research Institute
  • Research Area : Social Science > Business Management

Beum-Jo Park 1 Hong Chong Cho 1

1단국대학교

Accredited

ABSTRACT

We propose a supplemented eliciting method of measuring risk aversion through a laboratory experiment to overcome disadvantages of the multiple pricing list format developed by Holt and Laury (2002) and to standardize the risk aversion ranking by quantile normalization. Our method does not adhere to any specific utility function and is free of the framing effect or the multiple switching problem. Furthermore, with the new measure of risk aversion, we examine how individuals change risk attitude and decision making time when they face new informational disadvantages, i.e., less information about asset markets than experts. Decision making time gets shorter and risk aversion rises significantly when individuals perceive themselves informationally disadvantaged.

Citation status

* References for papers published after 2022 are currently being built.

This paper was written with support from the National Research Foundation of Korea.