TITLE:
Testing Validity of Using Sample Mean in Studies of Behavioral Facts
AUTHORS:
Yongchen Zou, Runqi Hu
KEYWORDS:
Risk Preferences, Behavioral Economics, Prospect Theory, Heuristics
JOURNAL NAME:
Modern Economy,
Vol.2 No.3,
July
29,
2011
ABSTRACT: In this paper we argue that a couple of taken-for-granted methods employed in studying behavioral facts of human risk preference are mistakable. We call for within-subjects experiment design and propose a simple statistical method that might be used to test the validity of using sample mean in interpreting as well as generalizing risk preferences.