Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison

This paper reports on an empirical comparison of two prominent measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen et al. (2011) - with respect to their within-subject stability over time (one year) and their correlation with actual risk-taking behavior in the lab - here the amount sent in a trust game (Berg et al., 1995). Our results suggest that the two risk attitude measures are at best only weakly correlated. Only the questionnaire measure shows high test-retest stability, while virtually no such stability is found in the lottery-choice task. In addition, only the questionnaire measure shows the expected correlations with a Big Five personality measure and is correlated with actual risk-taking behavior. With respect to behavior in the trust game, we find a high retest stability of transfers. This supports the conjecture that trusting behavior has a component which itself is a stable individual characteristic.