Who really wants to be a millionaire? Estimates of risk aversion from gameshow data
Hartley, Roger, 1946-, Lanot, Gauthier and Walker, Ian, 1954- (2006) Who really wants to be a millionaire? Estimates of risk aversion from gameshow data. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.747).
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This paper analyses the behaviour of contestants in one of the most popular TV gameshows ever to estimate risk aversion. This gameshow has a number of features that makes it well suited for our analysis: the format is extremely straightforward, it involves no strategic decision-making, we have a large number of observations, and the prizes are cash and paid immediately, and cover a large range – from £100 up to £1 million. Our data sources have the virtue that we are able to check the representativeness of the gameshow participants. Even though the CRRA model is extremely restrictive we find that a coefficient or relative risk aversion which is close to unity fits the data across a wide range of wealth remarkably well.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
|Library of Congress Subject Headings (LCSH):||Who wants to be a millionaire, Game theory, Risk assessment, Choice (Psychology), Rational choice theory|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||21 April 2006|
|Number of Pages:||54|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Funder:||Economic and Social Research Council (Great Britain) (ESRC)|
|Grant number:||R000239740 (ESRC)|
Adda, J. and R. Cooper (2003), Dynamic Economics, MIT Press: Cambridge, MA.
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