Eliciting risk preferences using choice lists

David J. Freeman, Yoram Halevy, Terri Kneeland

Research output: Contribution to journalArticlepeer-review

19 Scopus citations


We study the effect of embedding pairwise choices between lotteries within a choice list on measured risk attitude. Using an experiment with online workers, we find that subjects choose the risky lottery rather than a sure payment significantly more often when responding to a choice list. This behavior can be rationalized by the interaction between nonexpected utility and the random incentive system, as suggested by Karni and Safra ().

Original languageAmerican English
Pages (from-to)217-237
Number of pages21
JournalQuantitative Economics
Issue number1
StatePublished - Jan 2019
Externally publishedYes

Bibliographical note

Funding Information:
David J. Freeman: david_freeman@sfu.ca Yoram Halevy: yoram.halevy@utoronto.ca Terri Kneeland: t.kneeland@ucl.ac.uk We are grateful for comments from audiences at CEA 2012 in Calgary, SITE Experimental Economics session 2012, ESA North American Winter Meetings 2012 and 2013 (special panel discussion on “incentives in experiments”), FUR 2014 in Rotterdam, Decisions: Theory, Experiments and Applications (D-TEA) 2014 at HEC Paris, SEA 2014 in Atlanta, CEA 2015 in Toronto, and M-BEES 2015, and also from Garrett Petersen. We thank the two anonymous referees for insightful suggestions that improved the paper. The research reported in this paper was conducted under UBC Behavioural Research Ethics Board certificate of approval H11-01719. Financial support from SSHRC through grants 410-2009-1062 and 435-2012-0577 is gratefully acknowledged.

Publisher Copyright:
Copyright © 2019 The Authors.


  • C90
  • C91
  • D81
  • D90
  • Random incentive system
  • certainty effect
  • independence axiom
  • isolation
  • multiple price list
  • preference reversals
  • reduction of compound lotteries


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