Dynamic estimation of risk preferences: behavioral and neuroeconomic study

Using a novel technique of ‘ball catch’ game, we study the determinants of human preferences in a combined interdisciplinary study featuring behavioral modeling and neurophysiological data. We focus on two major determinants of decisions: beliefs in own abilities, or aspiration levels, and attitudes towards risk per se. We found that subjects with higher beliefs in own abilities are more persistent in their choices, while subjects who are less certain in these are more undecisive. We also found evidence of non-motivated risk-taking behavior unrelated to the monetary incentives. This discrepancy with the literature could be attributed to incorporating the real effort task combined with endogenous odds of success into our novel procedure.