We use a novel method to elicit and measure the intensities of higher order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theoretical predictions, we find that the degrees of higher order risk …
This paper empirically examines the behavioral precautionary saving hypothesis by Kőszegi and Rabin (2009) stating that uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also …
Measuring utility is at the heart of microeconomics and has important applications in many areas of economics. Here we present a new experimental method to elicit utility functions and associated measures of (higher order) risk preferences. The …