Valuing low probability risk: Survey and experimental evidence

Jamie Brown Kruse, Mark A. Thompson

Research output: Contribution to journalArticle

20 Scopus citations

Abstract

This study uses a survey question and an economics experiment to elicit the value of a risk mitigation investment. For 93 subjects (48 males and 45 females) the responses to hypothetical questions are compared with a risk mitigation decision that has a salient outcome. We find no gender-differentiated responses to either the maximum accepted price in the economics experiment or hypothetical willingness to pay questions from the survey. In our design, the two procedures generate aggregate measures that were in close agreement, however individual decisions were seldom consistent.

Original languageEnglish (US)
Pages (from-to)495-505
Number of pages11
JournalJournal of Economic Behavior and Organization
Volume50
Issue number4
DOIs
StatePublished - Apr 1 2003
Externally publishedYes

Keywords

  • Experiment
  • Gender
  • Low probability risk
  • Risk mitigation
  • Survey

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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