Experimental economists are leaving the reservation. They are recruiting subjects in the field rather than in the classroom, using field goods rather than induced valuations, and using field context rather than abstract terminology in instructions. We argue that there is something methodologically fundamental behind this trend. Field experiments differ from laboratory experiments in many ways. Although it is tempting to view field experiments as simply less controlled variants of laboratory experiments, we argue that to do so would be to seriously mischaracterize them. What passes for "control" in laboratory experiments might in fact be precisely the opposite if it is artificial to the subject or context of the task. We propose six factors that can be used to determine the field context of an experiment: the nature of the subject pool, the nature of the information that the subjects bring to the task, the nature of the commodity, the nature of the task or trading rules applied, the nature of the stakes, and the environment that subjects operate in.

We design experiments to jointly elicit risk and time preferences for the adult Danish population. Since subjects are generally risk averse, we find that joint elicitation provides estimates of discount rates that are significantly lower than those found in previous studies and more in line with what would be considered as a priori reasonable rates. The statistical specification relies on a theoretical framework that involves a latent trade-off between long-run optimization and short-run temptation. Estimation of this specification is undertaken using structural, maximum likelihood methods. Our main results based on exponential discounting are robust to alternative specifications such as hyperbolic discounting. These results have direct implications for attempts to elicit time preferences, as well as debates over the appropriate domain of the utility function when characterizing risk aversion and time consistency. Copyright Copyright 2008 by The Econometric Society.

We estimate individual discount rates with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268 people between 19 and 75 years of age. Individual discount rates are estimated for various households differentiated by socio-demographic characteristics such as income and age. Our conclusions are that discount rates are constant over the 6month to 3-year horizons used in these experiments, that discount rates vary with respect to several socio-demographic variables, and that they decline with age after middle age. Hence we conclude that it would be reasonable to assume constant discount rates for specific household types, but not the same rates across all households.

We review the experimental evidence on risk aversion in controlled laboratory settings. We review the strengths and weaknesses of alternative elicitation procedures, the strengths and weaknesses of alternative estimation procedures, and finally the effect of controlling for risk attitudes on inferences in experiments.Attitudes to risk are one of the primitives of economics. Individual preferences over risky prospects are taken as given and subjective in all standard economic theory. Turning to the characterization of risk in applied work, however, one observes many restrictive assumptions being used. In many cases individuals are simply assumed to be risk neutral; 1 or perhaps to have the same constant absolute or relative aversion to risk.2 Assumptions buy tractability, of course, but at a cost. How plausible are the restrictive assumptions about risk attitudes that are popularly used? If they are not plausible, perhaps there is some way in which one can characterize the distribution of risk attitudes so that it can be used to analyze the implications of relaxing these assumptions. If so, such characterizations will condition inferences about choice behavior under uncertainty, bidding in auctions, and behavior in games. Risk Aversion in ExperimentsResearch in Experimental Economics, Volume 12, Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0193-2306/doi:10.1016/S0193-2306(08)00003-3 41We examine the design of experimental procedures that can be used to estimate risk attitudes of individuals. We also investigate how the data generated by these procedures should be analyzed. We focus on procedures that allow ''direct'' estimation of risk preferences by eliciting choices in noninteractive settings, since we want to minimize the role of auxiliary or joint hypotheses about Nash Equilibrium (NE) behavior in games. It is important to try to get estimates that are independent of such joint assumptions, in order that the characterizations that emerge can be used to provide tighter tests of those joint assumptions.3 Nevertheless, we also include designs that rely on subjects recognizing a dominant strategy response in a game against the experimenter, although we will note settings in which the presumption that subjects actually use these might be suspect. 4 In Section 1 we consider the major procedures used to elicit risk attitudes. In Section 2 we review the alternative ways in which risk attitudes have been estimated from observed behavior using these procedures. In Section 3 we examine the manner in which measures of risk attitudes are used to draw inferences about lab behavior. Section 4 offers some thoughts on several open and closed issues, and Section 5 draws some grand conclusions.Our review is intended to complement the review by Cox and Sadiraj (2008) of theoretical issues in the use of concepts of risk aversion in experiments, as well as the review by Wilcox (2008a) of econometric issues involved in identifying risk attitudes when there is ...