New Journal Paper on Endowment effects in the risky investment game?

The paper is published as a  New Journal Paper and can be downloaded here

Abstract of the paper
The risky investment game of Gneezy and Potters (Q J Econ 112(2):631–645, 1997) has been proposed as a simple tool to measure risk aversion in applied settings, especially attractive in settings where participants may have limited education. However, this game can produce a significant endowment effect (attached to the initial position), so that analysis of the behavior in this game should not be done in the Expected Utility Theory (EUT) framework. The paper illustrates this point, by showing that risk tolerance can be much higher when the initial endowment concerns a risky lottery.

Published 14. May 2021 - 22:05 - Updated 15. May 2021 - 20:07