hypothetical had little or no effect on overall decision patterns. Models with increasing
relative risk aversion will be considered in Section 4.7.
4.2.4Price Based Assessments of a Certainty Equivalent
In addition to the investment method (a single choice among a structured set of alterna-
tive portfolios) and the choice menu method (structured binary choices), there is a third
approach to risk elicitation that is based on finding a subject’s certainty equivalent
money value of a gamble. Harrison (1986) first used the Becker et al. (1964) method to
determine certainty equivalents for a set of gambles with ...
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