We will use this space each week in the news blast for Justin to share new ideas he thinks may be of interest for our behavioral & experimental community. If you ever have ideas for topics, please share your ideas with
Justin
.
This Week's BRITE Idea:
This week we want to highlight a new
working paper
by Chapman, Snowberg, Wang and Camerer, called "Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)" .
The main reason we want to highlight the paper is methodological. The authors are introducing a new way to measure risk preferences and loss aversion instead of the standard multiple-price list or lottery-choice tasks. Their approach, which builds on some other similar papers, is to give people a series of simple choices. Which choice a person sees, though, depends on the choices they've made previously. The choice sequences are designed using Bayesian approaches to maximize the information you get about a person.
They show in the paper that this approach is accurate, stable and fast at the individual level. In terms of results, the paper is also interesting. While we focus a lot on loss aversion, this paper's key novel finding is that: Although many are loss averse, there are also many people who appear "loss tolerant".
