Narrow Framing in Risk Aversion Experiments: Further Evidence From a Wide Replication

Abstract

When evaluating risky options in experimental settings, do individuals integrate background finances with experimental earnings? An existing study, which combines experimental data on lottery choices and administrative data on personal wealth in Denmark, shows that individuals evaluate experimental payoffs in isolation. We replicate this finding using data from three experiments and survey-based measures of background finances for a representative Dutch sample. We show that the finding based on personal wealth extends to household wealth, personal income, and household income. The finding is also robust to different elicitation instruments, incentive structures, stake sizes, and interpersonal behavioral heterogeneity.