No abstract

We conduct an experiment to study the prevalence of the higher order risk attitudes of prudence and temperance, in a large demographically representative sample, as well as in a sample of undergraduate students. Participants make pairwise choices between lotteries of the form proposed by Eeckhoudt and Schlesinger (2006). The choices in these lotteries isolate risk aversion, prudence, and temperance levels to demographics and financial decisions. We and temperance, in both the student and the demographically representative sample. An , and borrowing behavior outside of the experiment, while temperance predicts the riskiness of portfolio choices. Our findings suggest that the coefficient of relative prudence for a representative individual is approximately equal to two.

No abstract

Proper scoring rules provide convenient and highly efficient tools for incentive‐compatible elicitations of subjective beliefs. As traditionally used, however, they are valid only under expected value maximization. This paper shows how they can be generalized to modern (“non‐expected utility”) theories of risk and ambiguity, yielding mutual benefits: users of scoring rules can benefit from the empirical realism of non‐expected utility, and analysts of ambiguity attitudes can benefit from efficient measurements using proper scoring rules. An experiment demonstrates the feasibility of our generalization.