Papers - Glenn W Harrison

Glenn W Harrison, Steven J Humphrey, Arjan Verschoor

Cited by*: 1 Downloads*: 24

We review experimental evidence collected from risky choice experiments using poor subjects in Ethiopia, India and Uganda. Using these data we estimate that just over 50% of our sample behaves in accordance with expected utility theory and that the rest subjectively weight probability according to prospect theory. Our results show that inferences about risk aversion are robust to whichever model we adopt when we estimate each model separately. However, when we allow both models to explain portions of the data simultaneously, we infer risk aversion for subjects behaving according to expected utility theory and risk seeking behavior for subjects behaving according to prospect theory. We conclude that the current practice of designing policies under the assumption that one or other explains all behavior is fundamentally flawed.

Glenn W Harrison, John A List

Cited by*: 0 Downloads*: 6

No abstract available

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom

Cited by*: 14 Downloads*: 22

Evidence that individuals have dynamically consistent preferences is usually generated by studying the discount rates of the individual over different horizons, but where those rates are elicited at a single point in time. If these elicited discount rates vary by horizon, the individual is typically claimed to have preferences that imply a dynamic inconsistency, although this inference requires additional assumptions such as intertemporal separability. However, what one really wants to know is if the same subject has the same discount rate function when that individual is asked at a later point in time. Such panel tests then require that one allow for possible changes in the states of nature that the subject faces, since they may confound any in-sample comparisons of discount rate functions at different points in time. We report the results of a large-scale panel experiment undertaken in the field that allows us to examine this issue. In June 2003, we elicited subjective discount rates from 253 subjects, representative of the adult Danish population. Between September 2003 and November 2004, we re-visited 97 of these subjects and repeated these tasks. In each visit, we also elicited information on their individual characteristics, as well as their expectations about the state of their own economic situation and macroeconomic variables. We find evidence in favor of dynamic consistency.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom, Melonie B Williams

Cited by*: 29 Downloads*: 303

We design experiments to jointly elicit risk and time preferences for the adult Danish population. The experimental procedures build on laboratory experiments that have been evaluated using traditional subject pools. The field experiments utilize field sampling designs that we developed, and procedures that were chosen to be relatively transparent in the field with non-standard subject pools. Our overall design was also intended to be a general template for such field experiments in other countries. We examine the characterization of risk over a wider domain for each subject than previous experiments, allowing more precise estimates of risk attitudes. We also examine individual discount rates over six time horizons, as the first stage in a panel experiment in which we revisit subjects to test consistency and stability of responses over time. Risk and time preferences are heterogeneous, varying by observable individual characteristics. On a methodological level, we implement a refinement of existing procedures which elicits much more precise estimates, and also mitigates framing effects.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom, Melonie B Williams

Cited by*: 219 Downloads*: 30

We estimate individual discount rates with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268 people between 19 and 75 years of age. Individual discount rates are estimated for various households differentiated by socio-demographic characteristics such as income and age. Our conclusions are that discount rates are constant over the 12-month to 3-year horizons used in these experiments, and that discount rates vary substantially with respect to several socio-demographic variables. Hence we conclude that it would be reasonable to assume constant discount rates for specific household types, but not the same rates across all households.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom

Cited by*: 378 Downloads*: 31

We estimate individual risk attitudes using controlled experiments in the field in Denmark. The experiments were carried out across Denmark using a representative sample of 253 people between 19 and 75 years of age. Risk attitudes are estimated for various individuals differentiated by socio-demographic characteristics. Our results indicate that the average Dane is risk averse, and that risk neutrality is an inappropriate assumption to apply. We also find that risk attitudes vary significantly with respect to several important socio-demographic variables such as age and education. However, we do not find any effect of sex on risk attitudes. Copyright The editors of the "Scandinavian Journal of Economics" 2007 .

Glenn W Harrison, John A List

Cited by*: 644 Downloads*: 105

Experimental economists are leaving the reservation. They are recruiting subjects in the field rather than in the classroom, using field goods rather than induced valuations, and using field context rather than abstract terminology in instructions. We argue that there is something methodologically fundamental behind this trend. Field experiments differ from laboratory experiments in many ways. Although it is tempting to view field experiments as simply less controlled variants of laboratory experiments, we argue that to do so would be to seriously mischaracterize them. What passes for "control" in laboratory experiments might in fact be precisely the opposite if it is artificial to the subject or context of the task. We propose six factors that can be used to determine the field context of an experiment: the nature of the subject pool, the nature of the information that the subjects bring to the task, the nature of the commodity, the nature of the task or trading rules applied, the nature of the stakes, and the environment that subjects operate in.

Glenn W Harrison

Cited by*: 5 Downloads*: 19

If we are to examine the role of "controls" in different experimental settings, it is appropriate that the word be defined carefully. The Oxford English Dictionary (Second Edition) defines the verb "control" in the following manner: "To exercise restraint or direction upon the free action of; to hold sway over, exercise power or authority over; to dominate, command." So the word means something more active and interventionist than is suggested by it's colloquial clinical usage. Control can include such mundane things as ensuring sterile equipment in a chemistry lab, to restrain the free flow of germs and unwanted particles that might contaminate some test.

Jeff P Carpenter, Glenn W Harrison, John A List

Cited by*: 16 Downloads*: 73

No abstract available

Glenn W Harrison, John A List

Cited by*: 23 Downloads*: 10

There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. In our treatments the subjects are not picked at random, as in lab experiments with student subjects, but are deliberately identified by their trading roles in the natural field setting. We find that experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, when experienced agents are observed bidding in an unfamiliar role, we find that they frequently fall prey to the winner's curse. We conclude that the theory predicts field behavior well when one is able to identify naturally occurring field counterparts to the key theoretical conditions.