These are the correctly plotted graphs from last week:
The graphs are not as similar as first thought. It seems, that in the certainty equivalence task i am more risk-taking than in the probability equivalence task. I do not really know how to explain this, but there is something about percentages, that i feel i need a really high probablity percentage of winning a great deal in order to be willing to take the risk of losing the amount i would have safely gotten if i would not have taken the lottery. With monetary amounts it is not the same: somehow by looking at the amounts i feel more willing to take the risk to win a great deal rather than less, because i have nothing at the moment anyway. It is strange though, that £ or % marks make a difference in strategy choice.
Although the Certainty Equivalence curve is not quite a straight line, it's not far off - especially bearing in mind a little bit of 'noise' in the measurement of utilities. That would seem to indicate that you are neither particularly risk-averse, nor risk-seeking. In other words, you might be relatively indifferent between a sure-thing and a gamble with the same expected value. Do you think that accurately describes you?
ReplyDeleteWith the Probability Equivalence measure you also have almost a straight line, except for the lower amounts at the left of the graph. This might suggest a degree of risk aversion for amounts in the lower £1,000s, but risk neutrality beyond about £30000. Also, according to Probability Equivalence you attach a much higher utility to £15,000 than is suggested by the Certainty Equivalence method.