two-thirds of the subjects in the low payoff treatment for Binswanger (1981) and Holt and
Laury (2002) are classified as risk averse, and only 20–25% are in the risk-neutral category,
with the remainder of about 10% being in a clearly risk seeking category.
19
The method-
ological implication is that if you are looking for qualitative results, then low payoffs may
be fine. A good example would be the Murnighan et al. (1988) and Millner and Pratt
(1991) papers that use (probability equivalent) risk aversion measures with low stakes to
categorize and sort players, in order to see how differences in risk aversion ...
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