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Individual vs. couple behavior: an experimental investigation of risk preferences

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Abstract

In this article, we elicit both individuals’ and couples’ preferences assuming prospect theory (PT) as a general theoretical framework for decision under risk. Our experimental method, based on certainty equivalents, allows to infer measurements of utility and probability weighting at the individual level and at the couple level. Our main results are twofold. First, risk attitude for couples is compatible with PT and incorporates deviations from expected utility similar to those found in individual decision making. Second, couples’ attitudes towards risk are found to be consistent with a mix of individual attitudes, women being more influent on couples’ preferences at low probability levels.

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Authors and Affiliations

  1. HEC-Paris & GREGHEC-CNRS, 1 rue de la libération, 78351, Jouy en Josas Cedex, France

    Mohammed Abdellaoui

  2. Crem-Université de Rennes 1 & GREGHEC, Rennes, France

    Olivier l’Haridon

  3. Université Paris Descartes & GREGHEC, Jouy en Josas Cedex, France

    Corina Paraschiv

Authors
  1. Mohammed Abdellaoui
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  2. Olivier l’Haridon
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  3. Corina Paraschiv
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Correspondence to Olivier l’Haridon.

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Abdellaoui, M., l’Haridon, O. & Paraschiv, C. Individual vs. couple behavior: an experimental investigation of risk preferences. Theory Decis 75, 175–191 (2013). https://doi.org/10.1007/s11238-012-9322-7

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  • DOI: https://doi.org/10.1007/s11238-012-9322-7

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