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Risky Choice in the Limelight

van den Assem, Martijn J.; Baltussen, Guido; van Dolder, Dennie


Martijn J. van den Assem

Guido Baltussen

Dennie van Dolder


This paper examines how risk behavior in the limelight differs from that in anonymity. In two separate experiments we find that subjects are more risk averse in the limelight. However, risky choices are similarly path dependent in the different treatments. Under both limelight and anonymous laboratory conditions, a simple prospect theory model with a path-dependent reference point provides a better explanation for subjects’ behavior than a flexible specification of expected utility theory. Additionally, our findings suggest that ambiguity aversion depends on being in the limelight, that passive experience has little effect on risk taking, and that reference points are determined by imperfectly updated expectations.


van den Assem, M. J., Baltussen, G., & van Dolder, D. (2016). Risky Choice in the Limelight. Review of Economics and Statistics, 98(2), 318-332.

Journal Article Type Article
Acceptance Date Sep 24, 2014
Online Publication Date Apr 21, 2016
Publication Date 2016-05
Deposit Date Nov 17, 2015
Journal Review of Economics and Statistics
Print ISSN 0034-6535
Electronic ISSN 1530-9142
Publisher Massachusetts Institute of Technology Press
Peer Reviewed Peer Reviewed
Volume 98
Issue 2
Pages 318-332
Keywords decision making under risk, risky choice, risk preferences, risk aversion, ambiguity aversion, limelight, accountability, public scrutiny, experience, game show, natural experiment, laboratory experiment, expected utility theory, prospect theory
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Additional Information This is the manuscript version of the article accepted for publication in Review of Economics and Statistics