Heimer, Rawley
[Verfasser:in];
Iliewa, Zwetelina
[Verfasser:in];
Imax, Alex
[Verfasser:in];
Weber, Martin
[Verfasser:in]
;
National Bureau of Economic Research
Reproduktionsnotiz:
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Entstehung:
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Beschreibung:
We document a robust dynamic inconsistency in risky choice. Using a unique brokerage dataset and a series of experiments, we compare people's initial risk-taking plans to their subsequent decisions. Across settings, people accept risk as part of a "loss-exit" strategy--planning to continue taking risk after gains and stopping after losses. Actual behavior deviates from initial strategies by cutting gains early and chasing losses. More people accept risk when offered a commitment to their initial strategy. Our results help reconcile seemingly contradictory findings on risk-taking in static versus dynamic contexts. We explore implications for theory and welfare