Abstract
In two pre-registered online studies during the COVID-19 pandemic and the early 2020 lockdown (one of which with a UK representative sample) we elicit risk-tolerance for 1,254 UK residents using four of the most widely applied risk-taking tasks in behavioral economics and psychology. Specifically, participants completed the incentive-compatible Balloon Analog Risk Task (BART) and the Binswanger-Eckel-Grossman (BEG) multiple lotteries task, as well as the Domain-Specific Risk-Taking Task (DOSPERT) and the self-reported questions for risk-taking used in the German Socio-economic Panel (SOEP) study. In addition, participants in the UK representative sample answered a range of questions about COVID-19-related risky behaviors selected from the UCL COVID-19 Social Survey and the ICL-YouGov survey on COVID-19 behaviors. Consistently with pre-COVID-19 times, we find that risk tolerance during the UK lockdown (i) was higher in men than in women and (ii) decreased with age. Undocumented in pre-COVID-19 times, we find some evidence for healthier participants displaying significantly higher risk-tolerance for self-reported risk measures. We find no systematic nor robust patterns of association between the COVID-19 risky behaviors and the four risk-taking tasks in our study. Moreover, we find no evidence in support of the so-called “risk compensation” hypothesis. If anything, it appears that participants who took greater risk in real-life COVID-19-relevant risky behaviors (e.g., isolating or taking precautions) also exhibited higher risk-tolerance in our experimental and self-reported risk-taking measures.
Highlights
There is increasing evidence in behavioral economics and psychology of high heterogeneity in risk tolerance across individuals, groups, and populations (e.g., Vieider et al, 2015a,b; Falk et al, 2018)
In the data collected from Study 1 and 2 we explored the potential heterogeneity of risk-taking across exogenous characteristics such as gender and age, which have previously been shown to be sources for inter-individual differences in risktaking
Given the relevance of the individual health status for the risks related to COVID-19, we looked at the heterogeneity of risk-taking across different levels of self-reported health in both studies
Summary
There is increasing evidence in behavioral economics and psychology of high heterogeneity in risk tolerance across individuals, groups, and populations (e.g., Vieider et al, 2015a,b; Falk et al, 2018). Gender In a large-scale study conducted by Falk et al (2018) heterogeneity in preferences was investigated among 80,000 participants across 76 countries using a combination of a lottery choice sequence (Falk et al, 2016) and the self-reported general SOEP risk-taking question. Amongst their most robust findings, women displayed substantially less risk tolerance than men. They noted, that the effect tended to be relatively small and was often not significant. Croson and Gneezy (2009) reviewed studies on gender differences in preferences (including risk-taking) and concluded that men were more risk taking than women
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