Consider the following five rows of choices between lottery A and lottery B. Based
on these, discuss what would be the choices of risk-averse, risk-neutral, or riskseeking individuals over the five rows.
Row Lottery A Lottery B
1 Win €110 or €0 with 50% probability Win €15 with 100% probability
2 Win €110 or €0 with 50% probability Win €35 with 100% probability
3 Win €110 or €0 with 50% probability Win €55 with 100% probability
4 Win €110 or €0 with 50% probability Win €75 with 100% probability
5 Win €110 or €0 with 50% probability Win €95 with 100% probability
Describe the methodology employed by Dohmen et al. (2011) to measure individual
risk preferences and outline the main findings of the study.
