Journal of Risk and Uncertainty

, Volume 56, Issue 1, pp 1–17 | Cite as

Complexity in risk elicitation may affect the conclusions: A demonstration using gender differences

  • Gary Charness
  • Catherine Eckel
  • Uri Gneezy
  • Agne Kajackaite


The Holt and Laury (American Economic Review, 92(5), 1644–1655, 2002) mechanism (HL) is the most widely-used method for eliciting risk preferences in economics. Participants typically make ten decisions with different variance options, with one of these choices randomly chosen for actual payoff. For this mechanism to provide an accurate measure of risk aversion, participants need to understand the choices and give consistent responses. Unfortunately, inconsistent and even dominated choices are often made. Can these mistakes lead to a misrepresentation of economic phenomena? We use gender differences in risk taking to test this question. In contrast to many findings in the literature, HL results typically do not find significant gender differences. We compare the HL approach, where we replicate the lack of significant gender differences, with a simpler presentation of the same choices in which participants make only one of the ten HL decisions; this simpler presentation yields strong gender differences indicating that women are more risk averse than men. We also find gender differences in the consistency of decisions. We believe that the results found in the simpler case are more reflective of underlying preferences, since the task is considerably easier to understand. Our results suggest that the complexity and structure of the risk elicitation mechanism can affect measured risk preferences. The issue of complexity and comprehension is also likely to be present with elicitation mechanisms in other realms of economic preferences.


Gender Risk preferences Elicitation mechanisms Complexity Experiment 

JEL Classifications

B49 C91 C99 D03 J16 



We thank Chetan Dave for helping with the structural analyses, and Billur Aksoy and Kristina Bott for helping to gather the data.

Supplementary material

11166_2018_9274_MOESM1_ESM.pdf (380 kb)
ESM 1 (PDF 379 kb)


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Gary Charness
    • 1
  • Catherine Eckel
    • 2
  • Uri Gneezy
    • 3
    • 4
  • Agne Kajackaite
    • 5
  1. 1.University of California Santa BarbaraSanta BarbaraUSA
  2. 2.Texas A&M UniversityCollege StationUSA
  3. 3.University of California San DiegoSan DiegoUSA
  4. 4.CREEDUniversity of AmsterdamAmsterdamNetherlands
  5. 5.WZB Berlin Social Science CenterBerlinGermany

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