The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes

We propose first, a simple task for the eliciting attitudes toward risky choice, the SGG lottery-panel task, which consists in a series of lotteries constructed to compensate riskier options with higher risk-return trade-offs. Using Principal Component Analysis technique, we show that the SGG lottery-panel task is capable of capturing two dimensions of individual risky decision making i.e. subjects’ average risk taking and their sensitivity towards variations in risk-return. From the results of a large experimental dataset, we confirm that the task systematically captures a number of regularities such as: A tendency to risk averse behavior (only around 10% of choices are compatible with risk neutrality); An attraction to certain payoffs compared to low risk lotteries, compatible with over-(under-) weighting of small (large) probabilities predicted in PT and; Gender differences, i.e. males being consistently less risk averse than females but both genders being similarly responsive to the increases in risk-premium. Another interesting result is that in hypothetical choices most individuals increase their risk taking responding to the increase in return to risk, as predicted by PT, while across panels with real rewards we see even more changes, but opposite to the expected pattern of riskier choices for higher risk-returns. Therefore, we conclude from our data that an “economic anomaly” emerges in the real reward choices opposite to the hypothetical choices. These findings are in line with Camerer's (1995) view that although in many domains, paid subjects probably do exert extra mental effort which improves their performance, choice over money gambles is not likely to be a domain in which effort will improve adherence to rational axioms (p. 635). Finally, we demonstrate that both dimensions of risk attitudes, average risk taking and sensitivity towards variations in the return to risk, are desirable not only to describe behavior under risk but also to explain behavior in other contexts, as illustrated by an example. In the second study, we propose three additional treatments intended to elicit risk attitudes under high stakes and mixed outcome (gains and losses) lotteries. Using a dataset obtained from a hypothetical implementation of the tasks we show that the new treatments are able to capture both dimensions of risk attitudes. This new dataset allows us to describe several regularities, both at the aggregate and within-subjects level. We find that in every treatment over 70% of choices show some degree of risk aversion and only between 0.6% and 15.3% of individuals are consistently risk neutral within the same treatment. We also confirm the existence of gender differences in the degree of risk taking, that is, in all treatments females prefer safer lotteries compared to males. Regarding our second dimension of risk attitudes we observe, in all treatments, an increase in risk taking in response to risk premium increases. Treatment comparisons reveal other regularities, such as a lower degree of risk taking in large stake treatments compared to low stake treatments and a lower degree of risk taking when losses are incorporated into the large stake lotteries. Results that are compatible with previous findings in the literature, for stake size effects (e.g., Binswanger, 1980; Antoni Bosch-Domènech & Silvestre, 1999; Hogarth & Einhorn, 1990; Holt & Laury, 2002; Kachelmeier & Shehata, 1992; Kühberger et al., 1999; B. J. Weber & Chapman, 2005; Wik et al., 2007) and domain effect (e.g., Brooks and Zank, 2005, Schoemaker, 1990, Wik et al., 2007). Whereas for small stake treatments, we find that the effect of incorporating losses into the outcomes is not so clear. At the aggregate level an increase in risk taking is observed, but also more dispersion in the choices, whilst at the within-subjects level the effect weakens. Finally, regarding responses to risk premium, we find that compared to only gains treatments sensitivity is lower in the mixed lotteries treatments (SL and LL). In general sensitivity to risk-return is more affected by the domain than the stake size. After having described the properties of risk attitudes as captured by the SGG risk elicitation task and its three new versions, it is important to recall that the danger of using unidimensional descriptions of risk attitudes goes beyond the incompatibility with modern economic theories like PT, CPT etc., all of which call for tests with multiple degrees of freedom. Being faithful to this recommendation, the contribution of this essay is an empirically and endogenously determined bi-dimensional specification of risk attitudes, useful to describe behavior under uncertainty and to explain behavior in other contexts. Hopefully, this will contribute to create large datasets containing a multidimensional description of individual risk attitudes, while at the same time allowing for a robust context, compatible with present and even future more complex descriptions of human attitudes towards risk.

From farmers’ perspective : pesticide use and pest control

Many studies have shown that farmers in developing countries often overuse pesticides and do not adopt safety practices. Policies and interventions to promote a safer use of pesticides are often based on a limited understanding of the farmers’ own perspective of pesticide use. This often results in ineffective policies and the persistence of significant pesticide-related health and environmental problems, especially in developing countries. This chapter explores potentials and limitations of different approaches to study pesticide use in agriculture from the farmers’ perspective. In contrast to the reductionist and mono-disciplinary approaches often adopted, this chapter calls for integrative methodological approaches to provide a realistic and thorough understanding of the farmers’ perspective on pesticide use and illustrates the added value of such an approach with three case studies of pesticide use in Iran, India, and Colombia.

How do people perceive, understand, and anticipate responding to flash flood risks and warnings? Results from a public survey in Boulder, Colorado, USA

This study investigates flash flood forecast and warning communication, interpretation, and decision making, using data from a survey of 418 members of the public in Boulder, Colorado, USA. Respondents to the public survey varied in their perceptions and understandings of flash flood risks in Boulder, and some had misconceptions about flash flood risks, such as the safety of crossing fast-flowing water. About 6% of respondents indicated consistent reversals of US watch-warning alert terminology. However, more in-depth analysis illustrates the multi-dimensional, situationally dependent meanings of flash flood alerts, as well as the importance of evaluating interpretation and use of warning information along with alert terminology. Some public respondents estimated low likelihoods of flash flooding given a flash flood warning; these were associated with lower anticipated likelihood of taking protective action given a warning. Protective action intentions were also lower among respondents who had less trust in flash flood warnings, those who had not made prior preparations for flash flooding, and those who believed themselves to be safer from flash flooding. Additional analysis, using open-ended survey questions about responses to warnings, elucidates the complex, contextual nature of protective decision making during flash flood threats. These findings suggest that warnings can play an important role not only by notifying people that there is a threat and helping motivate people to take protective action, but also by helping people evaluate what actions to take given their situation.

Self-concept clarity and compulsive Internet use: the role of preference for virtual interactions and employment status in British and North-American samples

Background and Aims Compulsive Internet Use (CIU) describes a maladaptive relationship with the Internet characterised by loss of control and conflict. Although also affecting adults, most studies use teenage samples, and theoretical development on risk factors is scarce. According to Davis (2001), the social connectivity function of the Internet is key in identifying traits associated with CIU. Since Self-Concept Clarity (SCC) is strongly related to social anxiety, and virtual interactions allow “self-edition”, we hypothesized that individuals low in SCC could choose virtual interactions as safer alternative to satisfy their social needs. This could in turn increase the risk of CIU. Building on a previous study, we also expected CIU to be more harmful in the unemployed. Methods We collected samples from the UK (N = 532) and US (N = 502) with equal distribution of employed and unemployed individuals. We ran Measurement Invariance tests to confirm that the constructs were equivalent across countries. Subsequently, we conducted mediation and moderation analysis to test our hypothesis with Multigroup Confirmatory Factor Analysis. Results Measurement Invariance was confirmed. The relationship between SCC and CIU was partially mediated by preference of virtual interactions in both countries. This preference was significantly related to lower social support. Short term unemployment seemed to accentuate the negative impact of CIU on life satisfaction in both countries, although only marginally significantly in the US. The unemployed reported significantly lower levels of life satisfaction. Conclusion We demonstrated that SCC is a key vulnerability factor to CIU in adults, and confirmed the additional risks for the unemployed.