BackgroundThe outbreak of COVID-19 has been a major interrupting event, challenging how societies and individuals deal with risk. An essential determinant of the virus’ spread is a series of individual decisions, such as wearing face masks in public space. Those decisions depend on trade-offs between costs and risks, and beliefs are key to explain these.MethodsWe elicit beliefs about the COVID-19 pandemic during lockdown in France by means of surveys asking French citizens about their belief of the infection fatality ratio for (...) COVID-19, own risk to catch the disease, risk as perceived by others, and expected prevalence rate. Those self-assessments were measured twice during lockdown: about 2 weeks after lockdown started and about 2 weeks before lockdown ended. We also measured the quality of these beliefs with respect to available evidence at the time of the surveys, allowing us to assess the calibration of beliefs based on risk-related socio-demographics. Finally, comparing own risk to expected prevalence rates in the two successive surveys provides a dynamic view of comparative optimism with respect to the disease.ResultsThe risk perceptions are rather high in absolute terms and they increased between the two surveys. We found no evidence for an impact of personal experience with COVID-19 on beliefs and lower risk perceptions of the IFR when someone in the respondent’s family has been diagnosed with a disease. Answers to survey 1 confirmed this pattern with a clear indication that respondents were optimistic about their chances to catch COVID-19. However, in survey 2, respondents revealed comparative pessimism.ConclusionThe results show that respondents overestimated the probabilities to catch or die from COVID-19, which is not unusual and does not necessarily reflect a strong deviation from rational behavior. While a rational model explains why the own risk to catch COVID-19 rose between the two surveys, it does not explain why the subjective assessment of the IFR remained stable. The comparative pessimism in survey 2 was likely due to a concomitant increase in the respondents’ perceived chances to catch the disease and a decreased expected prevalence rate. (shrink)

In this paper, we use the risk apportionment technique of Eeckhoudt, Rey and Schlesinger (2007) to study higher order risk preferences for others’ health as well as ex-ante and ex-post inequality preferences for social risky distributions, and their interaction. In an experiment on a sample of university students acting as impartial spectators, we observe risk aversion towards social health losses and a dislike of ex-ante inequality. In addition, evidence for ex-post inequality seeking is much weaker than evidence for ex-ante inequality (...) aversion. Because ex-ante inequality aversion is unrelated to risk aversion, we conclude that simple forms of utilitarianism are not relevant for individual judgment of social risk over health. Last, our investigation of precautionary distribution, which would occur when one particular group in the society suffers from background health risk, shows substantial polarization of preferences. (shrink)

In this article, we elicit both individuals’ and couples’ preferences assuming prospect theory (PT) as a general theoretical framework for decision under risk. Our experimental method, based on certainty equivalents, allows to infer measurements of utility and probability weighting at the individual level and at the couple level. Our main results are twofold. First, risk attitude for couples is compatible with PT and incorporates deviations from expected utility similar to those found in individual decision making. Second, couples’ attitudes towards risk (...) are found to be consistent with a mix of individual attitudes, women being more influent on couples’ preferences at low probability levels. (shrink)

Risk attitude is known to be a key determinant of various economic and financial choices. Behavioral studies that aim to evaluate the role of risk attitudes in contexts of this type, therefore, require tools for measuring individual risk tolerance. Recent developments in decision theory provide such tools. However, the methods available can be time consuming. As a result, some practitioners might have an incentive to prefer “fast and frugal” methods to clean but more costly methods. In this article, we focus (...) on a tractable procedure initially proposed by Holt and Laury (2002) to elicit risk attitude. We generalize this method to measure utility and risk aversion as follows. First, we allow measurement of probabilistic risk attitude through violations of expected utility due to probability weighting. Second, we use the outcome scale rather than the probability scale in the menu of choices. Third, we compare sure payoffs with lotteries instead of comparing non-degenerate lotteries. A within-subject experimental study illustrates the gains in tractability and bias minimization that can result from such an extension. (shrink)

In a recent article, Machina (Am Econ Rev forthcoming, 2008) suggested choice problems in the spirit of Ellsberg (Q J Econ 75:643–669, 1961), which challenge tail-separability, an implication of Choquet expected utility (CEU), to a similar extent as the Ellsberg paradox challenged the sure-thing principle implied by subjective expected utility (SEU). We have tested choice behavior for bets on one of Machina’s choice problems, the reflection example. Our results indicate that tail-separability is violated by a large majority of subjects (over (...) 70% of the sample). These empirical findings complement the theoretical analysis of Machina (Am Econ Rev forthcoming, 2008) and, together, they confirm the need for new approaches in the analysis of ambiguity for decision making. (shrink)