||The effect of risk attitudes on search behavior : A laboratory search experiment
Sasaki, Masaru ,
Inukai, KeigoMiura, Takahiro
Discussion Papers In Economics And Business
16 , 2017-06 , Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
This paper tests the effect of risk preferences on search activities by using a laboratory experiment. We used an infinite-horizon sequential search model with no recall in which an individual gains over search. We elicit the risk preferences from observed search activities of participants and from the multiple price list (MPL) method. We found the statistically significant effect of risk preferences elicited from the MPL method on the duration of search. The search duration is on average shorter for a risk averse individual than for risk loving one, which is consistent with the theoretical prediction. The significant effect of risk preferences on search activities has not been observed in the previous literature that used search model with recall in which an individual pays from the initial endowment over search (Schunk 2009, Schunk and Winter 2009). Therefore, the correlation between risk preferences and search activities depends on the type of search models.