Violence and Risk Preference: Experimental Evidence from Afghanistan: Comment
American Economic Review
vol. 108,
no. 8, August 2018
(pp. 2366-82)
Abstract
In this comment on Callen et al. (2014), I revisit recent evidence uncovering a "preference for certainty" in violation of dominant normative and descriptive theories of decision-making under risk. I show that the empirical findings are potentially confounded by systematic noise. I then develop choice lists that allow me to disentangle these different explanations. Experimental results obtained with these lists reject explanations based on a preference for certainty in favor of explanations based on random choice. From a theoretical point of view, the levels of risk aversion detected in the choice list involving certainty can be accounted for by prospect theory through reference dependence activated by salient outcomes.Citation
Vieider, Ferdinand M. 2018. "Violence and Risk Preference: Experimental Evidence from Afghanistan: Comment." American Economic Review, 108 (8): 2366-82. DOI: 10.1257/aer.20160789Additional Materials
JEL Classification
- A12 Relation of Economics to Other Disciplines
- C91 Design of Experiments: Laboratory, Individual
- D12 Consumer Economics: Empirical Analysis
- D74 Conflict; Conflict Resolution; Alliances; Revolutions
- D81 Criteria for Decision-Making under Risk and Uncertainty
- O12 Microeconomic Analyses of Economic Development
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements