Dynamic Inconsistency in Risky Choice: Evidence from the Lab and Field

Join us for the first event of the Microeconomics Research Seminar Series, Spring Term 2021

Dr Alex Imas from the Booth School of Business, at the University of Chicago, will present their research on Dynamic Inconsistency in Risky Choice: Evidence from the Lab and Field.

Abstract: We document a dynamic inconsistency in risky choice. Using a unique brokerage dataset and two preregistered experiments, we compare people's initial risk-taking plans to their subsequent decisions. In both settings, people accept risk as part of a ''loss-exit" strategy---planning to continue taking risk after gains and stopping after losses. Actual behavior follows the reverse pattern, deviating from initial strategies by cutting gains early and chasing losses. More individuals accept risk when offered a commitment to their initial strategy. Our results help reconcile seemingly contradictory findings on risk-taking in static versus dynamic contexts. We discuss implications for theory and welfare.

This seminar will be held via Zoom on Monday 15th March at 4pm. This event is open to all levels of study and is also open to the public. To register your place and gain access to the webinar, please contact the seminar organisers.

This event is part of the Microeconomics Research Seminar Series.