Experiments On Individual's Risk And Time Preferences

In the past decades,research methodology of experimental economics has been applied into many aspects of economics research.Especially,many scholars and economists did experiments on individual risk and time preferences; and developed many related theories.In China,experimental research on economics is still on the starting point.It needs more research on individual preference in future.Firstly,this paper states experimental study on individual risk preference;analyses factors that can affect individual risk preference through lottery choice experiments; then compares and analyses individual risk preference under matching and choosing condition in order to conclude preference changes with different experimental conditions; studies whether there exists status-quo under each experimental condition. Secondly,researches on individual time preference;gets individual time indifference points under matching condition; compares the changes when switching experimental conditions; tests whether there exists status-quo under different condition.Last,this paper studies on the relationship between risk and time preferences. The results show that;First of all,under risk,risky probability,the amount of certain income and risky yields are three factors that participants take into consideration when faced with equal expected-value choices.Risky probability is subjects' main consideration.Consistent with the hypothesis of scale compatibility,a reversal happens from choice to matching. The results indicate that,when face with choices,participants are more inclined to consider the main factor—risky probability; however,when deal with matching,they tend to take all three factors mentioned above into consideration in their decision making.Second,as delay yields increase,participants have the intention to increase their patience to delay,and there is a linear relationship between investment yields and the degree of patience.Individual time preference is not consistent and is affected by the preference eliciting methods and expected value.In choice,relative short delay is the main consideration for participants which means they have a present bias.In matching, however,although delay is still a main consideration,other aspects also receive considerable weight.Finally,for most of the participants,under the same outcome condition, individual's attitudes towards risk and delay are same which means higher risk is considered the same as a longer delay.